The US Energy Information Administration (EIA) released a report on January 20, predicting that retail gasoline prices in the United States will decrease by up to 6% in 2026, with a slight increase of 1% expected in 2027.
This forecast by the agency follows the trend of declining gasoline prices in the US since hitting a historical high of $5 per gallon in mid-2022. In nominal terms, EIA estimates a 20-cent decrease in the price of gasoline per gallon in 2026, similar to the reductions seen in 2024 and 2025.
According to data from the American Automobile Association (AAA), as of January 20, the average price of regular gasoline in the US was $2.82 per gallon, lower than the $3.12 price from a year ago.
The primary determinant of retail gasoline prices is the price of crude oil. Over the past decade, crude oil prices have accounted for over 50% of gasoline prices on average. EIA indicates that this proportion is expected to drop below 45% in both 2026 and 2027.
EIA predicts that global crude oil supply will continue to exceed demand in 2026, leading prices to fall to the lowest annual average level since 2025.
Gasoline crack spreads, which measure the difference between crude oil prices and wholesale gasoline prices, are expected to be larger in 2026 compared to the past two years. This indicator serves as a reference for measuring refinery profitability.
On a regional trend basis, EIA forecasts that gasoline prices will decrease in all regions in 2026 and experience a slight increase in 2027.
However, the agency also notes that despite the expected increase in gasoline prices in 2027, average gasoline prices across the US, excluding the West Coast (PADD 5) region, will still be lower than the 2025 average. The West Coast region is expected to have relatively higher gasoline profit margins and prices due to refinery capacity losses, with nominal prices remaining similar to 2025 levels.
“The West Coast typically has the highest gasoline prices in the US, and we expect this trend to continue into 2027. The Gulf Coast region is projected to maintain the lowest gasoline prices, followed by the Midwest,” stated EIA.
High oil prices in the West Coast region are attributed to factors such as higher state taxes and fees, stricter environmental regulations, special clean fuel requirements, limited pipeline connections, among others.
A document released by the US Department of Energy on January 19 mentioned that EIA’s forecasts were made against the backdrop of the Trump administration’s efforts to achieve “record-high production” of domestic crude oil.
In 2025, US oil production reached a historical high of 13.6 million barrels per day, and it is anticipated to continue this trend this year. The Department of Energy stated that this development will help lower gasoline prices for Americans.
The Epoch Times contacted the Department of Energy for verification but had not received a response at the time of publication. ◇