Fuels

Expect ‘Curveballs’ in Gasoline Prices This Year: GasBuddy

Why $7 per gallon isn’t out of the question in 2023
Photograph: Shutterstock

After a “tumultuous” year for gasoline prices, some relief may be on the way in 2023, said Patrick De Haan, head of petroleum analysis at GasBuddy, in the fuel savings platform’s 2023 Fuel Outlook. But while most major U.S. cities will see prices top out around $4 per gallon, areas of California like San Francisco and Los Angeles could experience near $7 gas prices again in the summer if refineries struggle under unique gasoline formulation mandates.

Barring unexpected challenges, gas prices in 2023 should return to normal seasonal fluctuations, rising in the spring and dropping after Labor Day, said GasBuddy. The national average could decline early in the year as demand remains seasonally weak; however, it will be followed by a rise that starts in late winter, bringing prices to the $4-per-gallon range in time for summer, it said.

GasBuddy forecasts that the yearly national average price of gas in 2023 will drop nearly 50 cents per gallon (CPG) from that of 2022 to $3.49. Continuing improvement in refinery capacity will help alleviate gasoline and diesel prices, it said, though high levels of uncertainty remain over Russia’s ongoing war on Ukraine and continuing economic concerns. A $4 national average remains possible ahead of and during the summer driving season.

Americans will spend an estimated $470.8 billion on gasoline in 2023, down $55 billion from 2022, said GasBuddy. The estimated yearly household spend on gasoline will also fall $277 to $2,471.

“2023 is not going to be a cakewalk for motorists. It could be expensive,” said De Haan. “The national average could breach $4 per gallon as early as May [but] … curveballs are coming from every direction. Extreme amounts of volatility remain possible, but should become slightly more muted in the year ahead. I don’t think we’ve ever seen such an amount of volatility as we saw this year, and that will be a trend that likely continues to lead to wider uncertainty over fuel prices going into 2023.”

The report forecasts the highest gasoline prices to be seen in June, with an estimated peak of up to $4.19 per gallon on average. It forecasts diesel prices to average $4.12 in 2023, beginning the year at their highest level and then rebounding as high as $4.30 per gallon in June.

Download the full 2023 Fuel Outlook here.

GasBuddy is a unit of PDI Technologies Inc., Dallas.

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