Americans on pace to spend lowest amount on gasoline in last two decades
Even as the inflation rate continues to tick higher, Americans are spending less of their disposable income on gasoline than at any time in the past two decades, except during the lockdowns of the COVID-19 pandemic. The U.S. Energy Information Administration (EIA) expects gasoline expenses to take less than 2% of individuals’ earnings by the end of 2025.
“The good news for consumers is that we are generally seeing lower prices at the pump, and we expect gasoline prices to keep trending lower through next year,” the EIA’s acting administrator, Steve Nalley, said.
Gas prices continue to fall
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The Energy Information Administration estimates Americans will spend less than 2% of their disposable income this year on gasoline, down from an average of 2.4% over the previous decade.
The agency projects the average price of a gallon of regular unleaded to land at $3.10 for the year and to keep falling to $2.90 for 2026. By comparison, the average in 2024 was $3.30.
As of Friday morning, AAA showed the average price for regular unleaded at $3.18 a gallon, down about 6 cents from a year ago. Premium grades average $4.03 a gallon, down 4 cents from last year at this time.
California, Oregon and Washington have the highest prices, while Texas, Missouri and North Carolina have some of the lowest prices at the pump.
The EIA forecasts that crude oil prices will drop from $68 per barrel in August to $59 per barrel in the fourth quarter, leading to lower gasoline prices. The forecast for the beginning of 2026 is about $50 a barrel.
Key factors
Gas prices often follow oil prices, which depend on production and output.
Fox Business, citing the International Energy Agency, reports that OPEC+ members are expected to continue increasing output. It says supply could increase by 2.7 million barrels per day and another 2.1 million barrels per day in 2026.
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Ella Rae Greene, Editor In Chief
