Additional Coverage:
- Gas prices in America have hit a record low in 2025 — here’s what to expect next year (marketrealist.com)
Gas Prices Offer a Bright Spot Amidst Lingering Inflation Worries
Nationwide – As 2025 draws to a close, American consumers have been grappling with persistent inflation and a challenging affordability crisis. However, one significant area has offered a welcome reprieve: gasoline prices. Throughout the year, the cost at the pump has steadily declined, culminating in a festive surprise for holiday travelers.
Average gasoline prices recently dipped to a remarkable $2.79 per gallon nationwide, allowing holiday-goers to enjoy substantial savings. In some states, like Oklahoma, the relief was even more pronounced, with prices hitting an astonishing record low of $2.10 per gallon.
Looking ahead to 2026, the outlook remains positive. The U.S. Energy Information Administration (EIA) projects a continued decrease in average gasoline prices for the coming year.
According to 24/7 WallSt., the current annual average cost of gas for an American household hovers around $2,500, representing approximately 3.2% of total household expenses. In an economy heavily reliant on consumer spending, where it accounts for 70% of the gross domestic product, any increase in discretionary income-even a small one from lower gas prices-is a favorable sign.
Currently, states such as Oklahoma, Texas, Arkansas, Mississippi, Iowa, Tennessee, and Colorado are seeing average gas prices around $2.40 per gallon. Conversely, residents in California, Oregon, and Washington continue to face higher costs, with averages near or exceeding $4 per gallon.
While concerns persist regarding potential future price hikes due to OPEC+’s announced production cuts, these have yet to materialize in recent months. The U.S. has maintained robust oil production, with Benchmark WTI crude currently trading at $57 a barrel, a notable decrease from the $80 mark seen in January 2025.
Despite these anxieties, the EIA’s Short Term Energy Outlook (STEO), released earlier this month, forecasts a further drop in average gas prices for 2026, estimating they will fall to $3.00 per gallon from $3.11 per gallon in 2025. The STEO also projects a decline in the average on-highway diesel fuel retail price, from $3.60 per gallon in 2025 to $3.32 per gallon in 2026-a significant drop from the $3.60 average in 2024. This relief at the pump is a welcome development for Americans seeking some financial breathing room amidst broader affordability challenges.
However, the savings from lower gas prices may be partially offset by rising costs in other energy sectors. Electricity bills are expected to increase in the coming year, driven by the ongoing construction of power-intensive data centers for AI development and cryptocurrency operations.
According to the Bureau of Labor Statistics, electricity prices have climbed 36% over the past five years, and the EIA anticipates a further 4.2% increase next year, with some regions experiencing even higher hikes. Additionally, natural gas prices are projected to be 16% higher in 2026.
While gas prices offer a glimmer of hope for consumers, the overall energy landscape remains a mixed bag as we head into the new year.