Economic News

GasBuddy: Fuel Prices Expected to Rise For Several More Months

With 2022 about to get underway, there have been several predictions about what the new year will bring. Among them is a forecast that gas prices will get worse overall before they get better. According to data from GasBuddy (as reported by CNN Business), it is expected that the average price per gallon of gas will reach $3.41 in 2022 compared to a $3.04 average this year. Moreover, the site anticipates that prices will peak at $3.79 around the Memorial Day holiday. After that, based on current projections, prices may recede. Commenting on the prediction, GasBuddy head of petroleum analysis Patrick De Haan told CNN, “We could see a national average that flirts with, or in a worst-case scenario, potentially exceeds $4 a gallon.”

GasBuddy’s prediction comes on the heels of their regular monthly gas price report. Incidentally, that data showed average prices falling for a seventh consecutive week. Last week, the nationwide average price per gallon was $3.25. That average is down 4.3 cents from one week prior and marks an 11.1 cent month-over-month decline. Nevertheless, it’s still up more than a dollar from this time last year. Interestingly, with an average price of $3.264 per gallon on December 25th, this year edged out 2013 (which recorded a $3.262 average) to claim the title of most expensive Christmas Day gas prices the app has ever recorded.

Looking more closely at the data, the most common gas price that Americans encountered last week was $2.99 while the median price stood at $3.13 per gallon. Among the most expensive 10% of stations, the average price came in at $4.31 cents, which was down 8¢ from the week beforehand. As for the cheapest 10% of gas stations, the average fell 3¢ from last week to hit $2.71.

Per usual, Oklahoma and Texas both made the list of states with the lowest average prices, both coming in at $2.83. However, Arkansas also made the top three this time around (edging out perennials such as Mississippi) with an average of $2.89. On the other end, the usual suspects saw the highest averages: California ($4.62), Hawaii ($4.28), and Nevada ($3.82).

Of note, in the report, De Haan warns that prices in certain states could see increases soon, writing “[G]as prices are likely to jump in the Great Lakes due to a behavior called price cycling, caused by a rise in the wholesale price of gasoline against a backdrop of prices in the region that have now fallen under replacement cost. This will trigger a likely jump in gas prices in Michigan, Indiana, Ohio, Illinois and Kentucky very soon.”

Of course, given the current state of things, there are plenty of factors that could impact these predictions. Nevertheless, drivers should be prepared to pay a bit more over the next few months. Meanwhile, there’s hope that overall inflation will subside in 2022 — although that’s a subject for another day.