(WMBD) — Petroleum analysis firm GasBuddy released their 2023 Fuel Outlook Wednesday, and it contains a mix of positives and negatives for drivers in the coming year.
The good news is that the average price of gas nationwide is expected to drop nearly 50 cents to average $3.49 per gallon.
However, Russia’s ongoing war on Ukraine and concerns around refinery capacity create a level of uncertainty that could result in a $4.00 average during the summer months.
“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.”
Highlights from the 2023 Fuel Outlook include:
- A seasonal drop in demand in the first few months of the year will lead to a lower average, but a rise in price is likely to start in early spring that will bring prices back up to $4 just in time for summer.
- Following normal seasonal trends, prices will likely drop again after Labor Day.
- While most cities will see prices capped at around $4 per gallon, certain areas of California could reach nearly $7 per gallon again if there are any unpredicted refinery struggles.
- 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.
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.
The full 2023 Fuel Outlook report can be downloaded from GasBuddy’s website.