$4 per gallon gas possible in spring before relief arrives, outlook says
Share this post:
Gasoline could reach a national average of $4 per gallon early next year, price tracking service GasBuddy says in its 2022 fuel price outlook released Wednesday.
For all of 2022, GasBuddy expects the national average price to increase by nearly 40 cents per gallon, from $3.02 in 2021 to $3.41.
A national average of $4 per gallon is possible in the spring because of recovery from the covid pandemic and rising demand before relief, or additional oil supply, comes later in the year.
If a national $4 average happens, it would be only the second time in history and the first time in more than a decade, said Patrick De Haan, head of petroleum analysis for GasBuddy
Higher gas prices are a sign of the economy’s continuing recovery from the pandemic, said De Haan, who has been analyzing fuel prices and trends for more than 15 years.
“No one would love to see $4 per gallon gasoline, but we’ll only get there on the back of a very strong economy, so it’s not necessarily bad news,” De Haan said. “There remains higher uncertainty than in a non-covid year, but all signs point to gas prices remaining elevated next year until the high prices attract additional oil supply, which will help prices cool off as we end 2022.
“The supply and demand system may not be perfect, but it works,” he said. “Until then, motorists will be forced to chalk up more of their hard-earned money to keep up with their insatiable thirst for gasoline.”
According to the outlook, the national average is forecast to climb early in the year, peaking as high as $4.13 per gallon in June. Prices are expected to then fall back to potentially just under $3 per gallon by the holiday season.
Most major U.S. cities could see prices peak around or just short of $4 per gallon. Some cities in California, such as San Francisco and Sacramento, could see average prices over $5 per gallon.
The only Pennsylvania city cited in the outlook is Philadelphia, where it says the daily average could peak between $4.05 and $4.30 per gallon.
The average household is expected to spend $2,341 on gasoline in 2022, the most since 2014. The nation’s yearly gasoline bill is forecast to increase by nearly $80 billion, to almost $485 billion, from 2021.
While conservatives blame President Biden for high gas prices — citing his cancellation of the Keystone XL pipeline and issuing a drilling moratorium on federal lands — more crude oil is needed before any concern about pipeline capacity, and the Department of Interior has been issuing new permits, De Haan said.
“We’d have seen a surge in gas prices no matter who was in the Oval Office,” he said. “Oil is a global commodity and the price is dictated by the world’s 8 billion people and their consumption, not one president.”