BOSTON — You could be paying more to fill up this year, thanks to an improving economy.
According to GasBuddy, the travel and navigation app, the national average could eventually hit $3 per gallon in 2021, thanks to economic recovery associated with improvements in the COVID-19 pandemic
While the risk exists for some pain at the pumps during the year, GasBuddy expects the yearly average will jump a more modest 27 cents per gallon in 2021.
Some highlights from GasBuddy’s 2021 Fuel Price Outlook include:
- The nation’s yearly gasoline bill will rise to nearly $326 billion dollars, an increase of over $45 billion from last year as the average household sees their annual gasoline spending rise to $1,670.
- The national average is forecast to rise as much as $1 per gallon from a low in January to a possible peak in July, as the nation continues to recover from the COVID-19 pandemic, boosting demand as Americans slowly return to pre-COVID behaviors.
- While much of the U.S. population will see prices remain in the $2 per gallon range, major cities in California and Hawaii will spend the entire year over $3, while others, including Chicago, New York City, Philadelphia, Phoenix and Seattle are also at risk of seeing average prices over $3 per gallon in 2021.
While many unknowns remain about what factors may impact gas prices in 2021, the largest likely factor driving gas prices in the year ahead will be COVID-19, and whether there is a broad recovery after the severe shutdowns and restrictions that sunk gasoline demand and prompted Americans to work and learn from home.
Other unknowns include whether oil production globally will return as quickly as demand may. Should production lack the rebound in demand, consumers are likely to be pinched at the pump. Lastly, President-elect Joe Biden will soon assume the White House, and with it, the nation may see a large change in policy towards the oil industry and petroleum use.
“While Americans are nearly guaranteed to see higher gas prices in 2021, it’s not all bad news. Average prices are still likely to be quite affordable, but some distinct and unpredictable changes in the COVID-19 pandemic may leave their wallets a bit more empty this year,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “However, I’m very optimistic that we’ll see improvement in the pandemic and see gas prices stay far under their previous records, leading Americans to perhaps turn to the nation’s highways to seek happiness after a year of stress and challenges, slamming the door on what was an awful 2020.”
Find the full report linked here.