2025 To Bring Third Straight Yearly Decline in Gas Prices, Though Risks Emerge

Americans are projected to spend over $12 billion less on gasoline in 2025 compared to 2024

GasBuddy, a PDI company, today released its 2025 Fuel Price Outlook, forecasting a third consecutive year of lower gas and diesel prices. The outlook highlights key trends in gasoline and diesel prices utilizing specific inputs, potential impacts on production, supply and demand changes and a change in leadership in Washington.

GasBuddy projects that the yearly national average for gasoline in 2025 will decline to $3.22 per gallon, down from $3.33 in 2024 and significantly below the record highs of 2022. This decline represents continued relief for American drivers, but comes amid emerging uncertainties surrounding geopolitical tensions, potential tariffs and a change in energy policies that add risk to this year’s forecast.

Highlights from GasBuddy’s 2025 Fuel Outlook:

• Lowest Monthly Average in December: The national average price of gasoline is expected to hit its lowest point in December, averaging $2.89 per gallon for the month.

• Springtime Spike: Gas prices could peak in April at a monthly average of $3.53 per gallon, while the daily average could top out as high as $3.67 per gallon, driven by seasonal increases in demand and the change to summer gasoline that occurs coast to coast at a varied pace.

• Regional Variations: While most major U.S. cities will see peak gas prices around $4 per gallon, West Coast cities such as Los Angeles and San Francisco could return to the mid-$5 per gallon range due to high fuel taxes, unique fuel requirements and other state mandates.

• Lower Consumer Spending: Americans are expected to spend a combined $410.8 billion on gasoline in 2025, an 8% decrease from 2024's estimated $423.1 billion.

"While declining fuel prices in 2025 will provide welcome relief to American drivers and businesses, emerging risks could lead to increased volatility," said Patrick De Haan, head of petroleum analysis at GasBuddy. "Geopolitical uncertainties, potential disruptions from extreme weather, and policy shifts under the new administration could create challenges for fuel markets. Despite this, expanding global refining capacity and moderating demand are expected to support lower prices for most of the year."

Diesel prices are also forecast to decline in 2025, with a projected yearly national average of $3.48 per gallon. This reduction will benefit industries dependent on diesel, such as freight and agriculture, offering some respite from recent cost pressures.

Download the full 2025 Fuel Outlook here.