Low Gas Prices Projected to Endure in 2016
CARS.COM — The national average for regular gasoline has hovered around $2 for nearly a month, and though it won’t stay that low, forecasters predict that motorists will pay less at the pump in 2016 than they did last year.
Related: More Fuel-Efficiency News
GasBuddy.com reported in its annual outlook that regular gas will average $2.28 for the year, 12 cents less than in 2015 and the fourth year in a row for lower prices. Diesel fuel will be even cheaper, according to projections, falling to an average of $2.16 during 2016. If the GasBuddy forecast holds true, it would be the first time since 2004 that the average price for diesel is lower than gas.
Drivers should expect the national average to peak around $2.65 to $2.70 a gallon during the spring and fall to close to $2 by the end of the year, with the net result being lower prices, GasBuddy senior petroleum analyst Patrick DeHaan said in a statement.
“There may be pain at the pump or hotspots that lead to skepticism about the future of fuel prices, but these hotspots will be relatively short-lived and only serve as a temporary roadblock to another year of affordable fuel prices,” DeHaan said.
The AAA travel-services organization predicted that the average price for regular gas would range from $2.25 to $2.45 a gallon, slightly cheaper or comparable to 2015.
“Based on typical seasonal trends, the national average price of gas could remain relatively flat or drop another 10 cents per gallon over the next few weeks,” AAA said in a statement. “By late winter, the national average could rise 50 cents per gallon or more as refineries conduct seasonal maintenance in advance of the busy summer driving season.
“Despite the likelihood of higher prices by spring, AAA does not expect the national average price of gas to rise above $3 per gallon in 2016.”
AAA and GasBuddy cautioned that the global glut of oil keeping pump prices low could be offset by a variety of factors, including unexpected outages at U.S. refineries, hurricanes or other weather-related events, and political or military developments in the Middle East. In addition, GasBuddy noted that some states could raise gasoline taxes this year.
One thing that won’t happen in 2016 is average gas prices declining as dramatically as last year. The average price of $2.40 for regular in 2015 was 94 cents lower than in 2014. The most recent peak year was 2012, when regular averaged $3.60.
AAA said the national average for premium gas was $2.50 a gallon as of Thursday morning (prices fluctuate throughout the day and could change), 10 cents lower than a year ago; diesel was $2.23, a decline of 84 cents from a year ago. Regular gas averaged less than $2 a gallon in 34 states. AAA listed Missouri as having the lowest average, $1.70, with five states at $1.75: Alabama, Arkansas, Oklahoma, South Carolina and Tennessee.
California, which was plagued by refinery and supply issues for much of 2015, had the most expensive gas at $2.88 a gallon, followed by Hawaii, $2.68, and Nevada, $2.51. Those were the only states where prices averaged more than $2.50.
AAA said California had the highest average prices for its first time during 2015. The national average for regular was $2 on Thursday, 19 cents lower than a year ago, but in California prices were 23 cents higher than at this time last year. The contrast was even greater compared with Hawaii, where the statewide average was 79 cents lower than last year. Hawaii traditionally has the highest prices because of its location and having to import all of its oil.
GasBuddy expects California will continue to experience supply issues and price spikes in 2016, predicting that prices in the San Francisco area could peak near $4 and in Los Angeles spike as high as $4.25 for regular.
