Motorists can expect a moderate reduction in U.S. gas prices in 2025 as inflation eases and amid a boom in domestic oil production.
After accelerating through much of the first half of the year, prices at the pump eased in the second half of 2024, AAA data shows Nationwide, now the average of a gallon of regular gas $2.98 a gallon, up nearly 12 cents from a year ago, according to tracking service GasBuddy.
The average price in the US is $2.89, although fuel costs can vary widely by region and state. Drivers in Hawaii, as usual, face the highest prices at $4.47 a gallon, followed by California ($4.27) and Washington ($3.81), GasBuddy said in a new article. report. The cheapest gas is in Oklahoma ($2.51), Mississippi ($2.55) and Texas ($2.59).
“After a few weeks of rising gas prices, the national average has reversed course, declining as we close out 2024,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement. “2024 will mark the second consecutive year of a decline in the national average.”
GasBuddy expects fuel prices to continue falling in 2025. After averaging $3.33 in 2024, the national average for a gallon of regular gas is expected to drop to $3.22 next year, CNN informedciting data from GasBuddy.
That could provide further relief to consumers, who continue to struggle with high prices for staples like food and rent. Most economists expect inflation to fall by 2025, though many warn that President-elect Donald Trump’s threat to impose broad tariffs and deporting unauthorized immigrants could lead to higher consumer prices.
“We wait for the underlying core [Personal Consumption Expenditures] trend inflation will drop from 2.8% to 2.1% at the end of 2025 recovery inflation ends next year and softer wage pressures translate into more modest price increases,” Goldman Sachs analysts said in a research note. “Our baseline tariffs would increase realized inflation in around 2.4%”.
The US is the world’s largest producer of crude oil, with an average 12.9 million barrels per day in 2023 — a record for any nation in the world, according to the Energy Information Administration.