That’s how much you’ll pay for a regular gallon of gas in January, on average—a welcome relief from the pain at the pump this year—if a new government forecast calling for gas prices to drop turns out to be correct.
And that price is expected to fall even further, to an average of $2.88 per gallon in 2022, the Energy Information Administration said on Wednesday. Gas has already started to drop: In December, the EIA expects gas to average $3.13 per gallon, down from $3.39 in November, when the average price climbed a dime in one month and reached its highest level since September 2014. On Wednesday, AAA said the day’s national average for a gallon of regular unleaded was $3.34.
This is all good news for consumers, who have been squeezed this year by climbing gas prices, which have raised the cost of everything from going to work or grocery shopping to visiting relatives and friends over the holidays, leaving consumers with less money to spend elsewhere.
Much of the recent decline in gas prices stems from a slide in the price of oil. Because oil prices account for about half of the price of gasoline, the cost of a gallon of gas often moves in the same direction as oil, though sometimes with a lag time.
Oil prices initially fell on Nov. 26 after countries imposed new international travel restrictions to slow the spread of the omicron variant of COVID-19. They fell further after the Organization of the Petroleum Exporting Countries and non-member countries (called OPEC+) decided last week to maintain its oil production schedule, which means plenty of oil available. That could bring down prices even if omicron worries fade.
Have a question, comment, or story to share? You can reach Medora at email@example.com.