Gas prices in America have hit a record low in 2025 — here's what to expect next year
America's inflation woes don't seem to be going away anytime soon, and an affordability crisis has kept consumers on their toes for almost all of 2025. But the price of gas has consistently dropped throughout the year. Recently, holiday travellers got to rejoice as their savings hit an all-time high with average gasoline prices dropping to $2.79 per gallon. For some states like Oklahoma, it was a shocking $2.10 per gallon, a record low. Now with 2026 at the doorstep, the outlook doesn't look bad either. According to the U.S. Energy Information Administration (EIA), the average prices are set to fall in the coming year.
As per 24/7 WallSt., the current average annual cost of gas for an American household is about $2,500, which accounts for roughly 3.2% of the average household expense. Furthermore, for an economy where consumer spending accounts for 70% of the gross domestic product, discretionary income is a major factor, and if gas prices take a little bit out of it, that's a good sign.
For some states like Oklahoma, Texas, Arkansas, Mississippi, Iowa, Tennessee, and Colorado, the average gas price is still hovering around $2.40 per gallon. For others like California, Oregon, and Washington, the average is close to or sometimes over $4 per gallon. Furthermore, there is anxiety about future prices as OPEC+ announced that it will cut production soon.
While that hasn't happened in the past several months, the U.S. has continued to pump oil. The Benchmark WTI crude is currently trading at $57 a barrel, down from the $80 mark in January 2025. Despite the concerns, the EIA's Short Term Energy Outlook (STEO), released earlier this month, estimated that gas prices are set to fall in 2026 to an average of $3.00 per gallon, from $3.11 per gallon.
The STEO further estimated that the average on-highway diesel fuel retail price will also drop from $3.60 per gallon in 2025 to $3.32 per gallon in 2026. This number was further higher in 2024, coming in at a whopping $3.60. Thus, with growing concerns of affordability, Americans need some relief, and gas prices may be one of the areas where they find it.
However, the savings from gas are likely to be offset by other energy costs, as the sector remains a mixed bag. The electricity bill for Americans is expected to rise in the coming year with the ongoing construction of power-consuming data centers for AI development and cryptocurrency. Electricity prices have climbed 36% over the last five years, according to the Bureau of Labor Statistics, and they are expected to climb further, as per the EIA. The STEO shared that electricity prices will rise by 4.2% next year, and the hikes will be higher in some areas of the country. Furthermore, natural gas prices are expected to be 16% higher in 2026.
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