EIA expects gasoline, diesel prices to fall in 2022 and 2023
The EIA expects regular gasoline retail prices to average $3.06/gal in 2022, up from $3.00/gal in 2021, and then down to $2.80/gal in 2023. They expect on-highway diesel prices to increase to average $3.33/gal in 2022 before decreasing to $3.27/gal in 2023. In the EIA's forecast, annual average diesel demand reaches 2019 levels in the U.S. in 2022.
The EIA expects that slower demand growth and increasing crude oil production through 2022 and 2023 will contribute to lower crude oil and petroleum product prices. Crude oil prices are the largest driver of retail gasoline and diesel fuel prices.
In 2022, the EIA expects recently reduced retail gasoline prices to continue to decline as demand growth slows. They estimate that annual average motor gasoline consumption, which fell by an estimated 1.2 MMbpd in 2020, increased by 0.7 MMbpd in 2021. They expect an additional increase of 0.3 MMbpd in 2022 and before a minor increase of less than 0.1 MMbpd in 2023.
The EIA expects U.S. gasoline consumption to remain below 2019 levels (9.3 MMbpd) on an annual basis through the STEO forecast. However, they forecast that driving trends will surpass pre-pandemic levels in 2022 and 2023, but they will be offset by continued increases in vehicle fleet fuel economy that will limit U.S. growth in gasoline demand.
Distillate fuel oil consumption (much of which is consumed as diesel) decreased from 4.1 MMbpd in 2019 to 3.8 MMbpd in 2020. In 2021, the EIA estimates consumption increased to 3.9 MMbpd. They expect distillate demand will return to just below 2019 levels in 2022.
Principal contributor: Kevin Hack
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