EIA expects lower gasoline prices in 2026 and 2027 as crude oil prices fall
Published by Ellie Brosnan,
Editorial Assistant
Hydrocarbon Engineering,
On a regional basis, EIA expects gasoline prices to decrease in every region in 2026 and increase in 2027. Despite that expected increase, 2027 average gasoline prices remain less than 2025 averages in every region except the West Coast (PADD 5), where the expected upcoming loss of refinery capacity will contribute to relatively higher gasoline margins and gasoline prices that are about equal to 2025, in nominal terms.
The West Coast region typically has the highest gasoline prices in the country, and that trend is expected to continue through 2027. The EIA expects the Gulf Coast region to maintain the lowest gasoline prices through the forecast, followed by the Midwest.
The forecast for generally lower retail gasoline prices over the next two years follows an ongoing trend of falling gasoline prices since reaching a historical high point of US$5/gal. in mid-2022. On a nominal basis, it is estimated that the US$0.20/gal. decrease in 2026 will be comparable to price decreases in 2024 and 2025.
The price of crude oil is the largest factor in determining US retail gasoline prices. In the previous 10 years, the price of crude oil used at US refineries accounted for slightly more than 50%, on average, of the retail average gasoline price. In 2026 and 2027, EIA expects crude oil’s contribution to the retail average gasoline price to fall below 45%, on an annual average basis. It also expects global increases in crude oil supply to continue to outpace increases in demand in 2026 and for crude oil prices to fall to their lowest annual average since 2020.
In 2026, crack spreads for gasoline are expected to be more than they were in the previous two years. Crack spreads are the difference between wholesale gasoline prices and crude oil prices, which can serve as a measure of refinery profitability.
Read the article online at: https://www.hydrocarbonengineering.com/refining/21012026/eia-expects-lower-gasoline-prices-in-2026-and-2027-as-crude-oil-prices-fall/
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