Gas prices in 2023 to fall nearly 50 cents per gallon; $4 remains possible

Published 6:10 pm Tuesday, January 3, 2023

National gas savings platform, Gas Buddy, is predicting a bit of relief in terms of gas prices this coming new year.

In a press release last week, Gas Buddy’s 2023 Fuel Outlook is forecasting a nearly 50 cents per gallon from from that of 2022 to $3.49.

Continuing improvement in refinery capacity will help alleviate gasoline and diesel prices, though high levels of uncertainty remain amidst Russia’s ongoing war on Ukraine and continuing economic  concerns. A $4 national average remains possible ahead of and during the summer driving season.

The outlook indicates that the average price of gas could cool early in the year as demand remains seasonally weak, followed by a rise that starts in late winter, bringing prices to the $4 per gallon range in  time for summer.

Barring unexpected challenges, prices in 2023 should return to normal seasonal fluctuations, rising in the spring, and dropping after Labor Day into the fall. 

Though most major U.S. cities will see prices top around $4 per gallon, areas of California like San Francisco and Los Angeles could again experience near $7 gas prices again in the  summer of 2023 if refineries struggle under mandates of unique formulations of gasoline.

Americans will spend an estimated $470.8 billion on gasoline in 2023, down $55 billion from  2022. The estimated yearly household spend on gasoline will also fall $277 to $2,471.

“2023 is not going to be a cakewalk for motorists. It could be expensive,” said Patrick De Haan, head  of petroleum analysis at GasBuddy. “The national average could breach $4 per gallon as early as May  – and that’s something that could last through much of the summer driving season. Basically,  curveballs are coming from every direction. Extreme amounts of volatility remain possible, but should  become slightly more muted in the year ahead. I don’t think we’ve ever seen such an amount of  volatility as we saw this year, and that will be a trend that likely continues to lead to wider uncertainty  over fuel prices going into 2023.”

The highest gasoline prices are forecast to be seen in June, with an estimated peak of up to $4.19 per  gallon on average. Diesel prices are forecast to average $4.12 in 2023, beginning the year at their  highest level and then rebounding as high as $4.30 per gallon in June.