2025 Gas Price Outlook Trends and Predictions

Drivers grappling with inflation have reason for optimism: Gas prices are projected to decline for a third consecutive year in 2025, according to exclusive GasBuddy forecasts shared with CNN.

GasBuddy, known for its accurate gas price predictions in recent years, anticipates the national average for regular gas to decrease to $3.22 per gallon next year. This represents a slight drop from 2024's average of $3.33 and would be the lowest annual average since 2021.

These projections contrast sharply with the unprecedented surge in mid-2022, when prices spiked above $5 per gallon nationally, straining the American economy and becoming a focal point of the inflation crisis. According to GasBuddy, Americans could collectively spend about $115 billion less on fuel in 2025 compared to 2022.

2025 looks to continue the trend of slow-but-steady improvement at the pump, Patrick De Haan, GasBuddy's head of petroleum analysis, told CNN. He noted that gas prices are expected to remain safely below $3.50 per gallon throughout the year, even during peak driving months in late spring and early summer.

The typical household is projected to spend $2,252 on fuel in 2025, which is higher than the pre-Covid level of $1,952 in 2019 but significantly below the 2022 peak of $2,715.

However, De Haan cautioned that this optimistic outlook could be disrupted by unpredictable factors, such as President-elect Donald Trump's proposed tariffs on Canada and Mexico.

Trump is a bit of a wildcard. He tends to disrupt the status quo, increasing risk and making it more challenging to predict prices, De Haan explained.

Gas prices, a highly visible economic indicator, significantly shape Americans' perceptions of the economy and their personal financial well-being. They act as a real-time measure of living costs and influence consumer sentiment.

President-elect Donald Trump has pledged to tackle the cost of living by prioritizing American energy dominance, proposing to roll back environmental regulations and accelerate permitting to increase the supply of oil and natural gas. On the campaign trail, Trump vowed to bring gas prices below $2 a gallon, though he did not specify a timeline for achieving this goal.

Despite the sharp decline in gas prices since mid-2022, industry experts remain skeptical of such claims. They argue that prices below $2 a gallon are improbable unless triggered by a recession or a significant demand collapse.

GasBuddy’s 2025 forecast projects national averages well above $2 per gallon, with the lowest anticipated monthly average at $2.81 in December.

Our figures aren’t even on the same planet as what the President-elect has promised, said Patrick De Haan, GasBuddy’s head of petroleum analysis. The conditions simply don’t align for gas prices to drop that low under the current outlook.

Although Trump’s drill-baby-drill strategy could increase domestic oil production, the United States is already producing more oil than any country in history.

It’s uncertain whether production can rise significantly further or if there is enough demand to support substantially higher output, especially given the current subdued prices.

Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, warned CNN that unleashing excessive supply could lead to a glut, driving down energy prices and negatively impacting the oil and gas industry.

This is why economics, not politics, will drive the energy sector, Thummel explained.

However, projections for falling gas prices in 2025 could quickly change if unforeseen events disrupt supply chains. For instance, a broader crisis in the Middle East involving Iran or Saudi Arabia could send oil prices soaring.

Another significant risk is Trump’s proposed 25% tariff on Canadian and Mexican imports, which he has threatened to implement on his first day in office.

Canada, however, is the United States’ largest source of foreign oil. Last year alone, the U.S. imported 1.4 million barrels of Canadian crude oil per day—more than half of its total oil imports. Additionally, 733,000 barrels of Mexican crude were imported daily, according to federal data.

GasBuddy’s Patrick De Haan estimates that such a tariff would raise retail gas prices by 30 to 70 cents per gallon, a surge Trump would likely want to avoid as he enters office. Consequently, GasBuddy’s 2025 forecast assumes the tariffs will not be enacted.

Canadian and Mexican officials have vowed to retaliate against any tariffs, heightening the risk of a tit-for-tat trade conflict that could destabilize the closely connected North American economy.

De Haan cautioned that a full-scale trade war could reduce fuel demand, ultimately lowering prices.

If we saw $1.99 gas, he explained, it would be due to an economic calamity, not something Americans would celebrate.