- The Energy Information Administration (EIA) forecasts U.S. gasoline prices will fall about 6% in 2026 before rising slightly by 1% in 2027, remaining below recent-year averages.
- National gas prices are already lower, averaging $2.82 per gallon in January, down from $3.12 a year earlier, according to the American Automobile Association.
- Crude oil prices remain the biggest driver of gas prices, though their share of retail prices is expected to dip below 45% in 2026 to 2027 as supply outpaces demand.
- Gasoline prices are projected to decline in all U.S. regions in 2026, with the West Coast remaining the most expensive due to refinery constraints, taxes and regulations.
- Record U.S. oil and natural gas production, credited by the DOE to Trump-era energy policies, has helped lower energy costs, with oil output at 13.6 million bpd and natural gas savings totaling $1.6 trillion for consumers over 17 years.
A new forecast from the Energy Information Administration (EIA) has revealed that U.S. drivers are likely to see relief at the pump continue over the next several years, as retail gasoline prices are expected to trend lower before stabilizing.
In a Jan. 20 report, the EIA projected that average U.S. retail gasoline prices will decline by about 6% in 2026 before edging up slightly by roughly 1% in 2027. Even with the modest increase, prices are expected to remain below levels seen in recent years.
"Our forecast for generally lower retail gasoline prices over the next two years follows an ongoing trend of falling gasoline prices since reaching a historical high point of $5 per gallon in mid-2022," the agency said. "On a nominal basis, we estimate the 20 cents per gallon decrease in 2026 will be comparable to price decreases in 2024 and 2025."
According to data from the American Automobile Association, gasoline prices have already been moving lower as of Jan. 20. The national average price for regular gasoline stood at $2.82 per gallon, down from $3.12 per gallon a year earlier.
Crude oil prices remain the most significant factor influencing what consumers pay at the pump. Over the past decade, crude oil has accounted for slightly more than half of the average retail gasoline price. Looking ahead, the EIA expects that share to dip below 45% in 2026 and 2027, reflecting changing market dynamics.
The agency forecasts that global crude oil supplies will continue to outpace demand in 2026, pushing prices down to their lowest annual average since 2025. At the same time, gasoline crack spreads, the difference between crude oil prices and wholesale gasoline prices, are expected to widen in 2026 compared with the previous two years. Crack spreads are closely watched as an indicator of refinery profitability.
Regionally, gasoline prices are projected to fall across every part of the country in 2026, followed by increases in 2027. Even with those increases, average prices in 2027 are expected to remain below 2025 levels in all regions except the West Coast.
In the West Coast region, known as Petroleum Administration for Defense District 5, the EIA said the anticipated loss of refinery capacity is likely to contribute to higher gasoline margins, resulting in prices that are roughly equal to 2025 levels in nominal terms. The West Coast is expected to remain the most expensive region for gasoline through 2027, while the Gulf Coast is projected to have the lowest prices, followed by the Midwest. Higher West Coast prices are driven by a combination of factors, including state taxes and fees, stricter environmental regulations, specialized fuel requirements and limited pipeline connectivity.
DOE says Trump's policies helped lower energy prices
The EIA's outlook comes as U.S. crude oil production continues at historically high levels.
According to a Jan. 19 Department of Energy (DOE) fact sheet, domestic oil output reached a record 13.6 million barrels per day in 2025 and is expected to remain elevated this year. Officials said the surge in production has contributed to lower gasoline prices nationwide, with average pump prices near four-year lows at about $2.90 per gallon.
Natural gas production has also reached new highs. The Energy Department said U.S. natural gas output is expected to average 109 billion cubic feet per day this year, the highest level on record. Officials said expanded production has helped keep heating and electricity costs down for consumers.
Citing data from the American Gas Association, the department said natural gas use over the past 17 years, including forecasts through 2025, has delivered inflation-adjusted savings of roughly $1.6 trillion compared with peak prices in 2008. That translates to about $3,445 in savings for the average U.S. household.
The department also highlighted the Energy Dominance Financing Program, created under the Working Families Tax Cut, which it said will continue to support the development of natural gas projects nationwide.
In addition to boosting production, the Energy Department said it has begun replenishing the Strategic Petroleum Reserve after a 180-million-barrel drawdown in 2022. In November 2025, the department awarded contracts for the delivery of one million barrels of crude oil to the reserve from the Bryan Mound site, with deliveries scheduled between December 2025 and January 2026.
The department has credited all this supply expansion and easing price pressures to Trump's energy policies. This trend, as BrightU.AI's Enoch noted, is expected to benefit consumers and support economic stability, reinforcing the importance of domestic energy production and market-driven solutions.
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