Following a recent, dramatic drop in gas prices leading into the holidays, GasBuddy released its 2023 Fuel Outlook Dec. 28, which forecasts more relief may be on the way in the new year after a tumultuous 12 months at the pumps.
“2022 will go down as one of the most nauseating years to budget for fuel expenses, and perhaps one of the most depressing, having watched the national average hit the $5 per gallon mark, with diesel prices soaring to nearly $6,” said Patrick De Haan, head of petroleum analysis at GasBuddy, who assembled the outlook. “However, with prices starting to moderate as imbalances are worked through, Americans are going to start to feel that gas prices are no longer as much of a thorn in their side in 2023.”
According to GasBuddy, the yearly national average price of gas in 2023 is projected to drop by nearly 50 cents per gallon from 2022’s average to $3.49.
While De Haan notes that continued improvement in refinery capacity will help alleviate prices, he points out there are a number of factors and uncertainties that could still derail that reality.
Gas prices soared to new heights over the summer. – MATTHEW FAZELPOOR
“2023 is not going to be a cakewalk for motorists. It could be expensive. The national average could breach $4 a gallon as early as May – and that’s something that could last through much of the summer driving season,” De Haan explained.
“Basically, curveballs are coming from every direction. Extreme amounts of volatility remain possible but should become slightly more muted in the year ahead,” he said. “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.”
De Haan added that what we saw in 2022 was simply madness at the nation’s fuel pumps. “With records being set seemingly left and right as COVID imbalances persisted and Russia invaded Ukraine,” he said. “While it’s highly improbable that lightning strikes the same spot twice, the storm clouds over oil and refined markets may persist, and there still could be some spikes as the market remains somewhat tight.”
Highs and lows
The 2023 Fuel Outlook forecasts that the month of February will see the lowest prices nationally – at an average of $2.99 per gallon – while June is expected to the be highest at around $3.99 per gallon, with a strong chance of $4 prices returning then.
In total, nearly $471 billion is forecast to be spent on gasoline in the new year in the United States, which is down by more than $55 billion from the $526.2 billion spent in 2022. Yearly household spending on gasoline is projected to fall $277 to $2,471.
De Haan stressed that how things play out in 2023 will be based on the combination of global factors, rather than anything politicians do or don’t do.
“Americans love to hold onto the myth that politicians are all-powerful and all-knowing, but when it comes to gasoline prices, global influences on supply and demand are really the gremlin that determines prices, and politicians who only care about your vote would love you to think they can control everything, but really can’t do much over global fundamentals driving prices down or up,” said De Haan.
