BOSTON – GasBuddy, the travel and navigation app used by more North American drivers to save money on gas, predicts that 2021 may feature a sharp rally in gas prices by year end, warning that the national average could rise to as high as $3 per gallon should the nation broadly recover from 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.
“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.
For those making resolutions, GasBuddy suggests shopping around at the pump with the free GasBuddy app and driving less aggressively: the savings could add up to $477 per year, or roughly $10 per tank.
In addition, motorists can sign up for Pay with GasBuddy, a free program that links to your checking account and offers savings of up to 25 cents per gallon.
