Gas price statistics: how much does gas in the US cost?
Take a closer look at gas price statistics, explore their fluctuations, the reasons behind their rise, and what the future might hold.
Highlights
Gas prices vary significantly across states, with the West Coast often experiencing higher prices due to factors such as transportation costs, environmental regulations, and taxes.
Gas prices peaked in the summer of 2022 due to an energy supply shortage exacerbated by the Russia-Ukraine conflict.
During 2022, gas prices reached their highest cost, with regular unleaded hitting $5.016 and diesel climbing to $5.816.
Gas price forecasts suggest a mixed outlook, with gradual increases expected over the coming years.
Gas price statistics
Gas price statistics are more than just numbers; they're a reflection of global economic dynamics and geopolitical tensions.
The global fuel energy price index, which covers prices for crude oil, natural gas, coal, and propane, stood at 173.66 index points in January 2024, up from 100 in the base year of 2016.
The summer of 2022 marked a notable peak in these prices, with the index spiking due to an energy supply shortage exacerbated by the Russia-Ukraine conflict and its impact on global energy markets.
How much does gas cost?
Gas prices vary significantly across states, with the West Coast bearing the brunt of higher prices.
During the summer of 2022, drivers were greeted with eye-watering figures, with regular unleaded hitting $5.016 and diesel climbing to $5.816. Currently (March 19, 2024), California holds the dubious honor of having the highest gas prices, with a gallon setting you back $4.91, closely followed by Hawaii at $4.70. The two states regularly exchange first and second place as prices fluctuate.
The variance in how much gas costs across states can be attributed to several factors, including transportation costs, taxes, and regional supply-demand dynamics.
Data on gas prices shows that states on the West Coast often face higher gas prices due to their reliance on imported fuel and stricter environmental regulations. States with abundant oil reserves or lower taxes may enjoy relatively lower prices at the pump.
The below table from NerdWallet illustrates the state-by-state averages per gallon for regular unleaded gasoline as of March 14, 2024:
Why are gas prices going up?
Gas prices are on the rise, and there are several reasons why the price of gas is going up.
The cost of crude oil stands out as a significant contributor to the cost of gas, with fluctuations in oil prices directly impacting what you pay at the pump.
The table below illustrates how the cost of crude oil has influenced gas prices in the last decade:
Additionally, Russia's invasion of Ukraine sent shockwaves through global markets, leading to a surge in inflation rates worldwide.
This geopolitical turmoil has had far-reaching consequences. Argentina experienced a hyperinflation rate of 92% in 2022, highlighting the destabilizing effects of such conflicts on economies.
The war has also substantially impacted global GDP growth, with some countries, such as Saudi Arabia, witnessing notable increases. As several Western nations shifted their exports from Russia to Middle Eastern countries due to sanctions, Saudi Arabia emerged with a remarkable GDP growth of nearly 3%.
What is the future of gas prices?
The latest gas price statistics reveal that we are in for a bumpy ride.
According to the World Bank’s data on gas prices, US natural gas prices could average $6 in 2024, reflecting a steady increase compared to previous years.
Similarly, European gas prices are expected to trade at $28 in 2024, marking a significant drop from $40 in 2022.
The decline in European prices suggests a potential stabilization in the market, albeit at a lower level than in previous years. Liquefied Natural Gas (LNG) prices are also forecasted to follow a downward trajectory, with the World Bank predicting an average of $15.90 in 2024, down from $18.40 in 2022.
According to a Capex report, Wallet Investor's system provides insights into the future of gas prices, with natural gas price projections for 2025 and beyond.
The system projects a gradual increase in natural gas prices, with the fuel expected to rise to $8.798/MMBtu by December 2025 and climbing further to $12.013 by January 2028. These projections indicate a potential upward trend in gas prices over the coming years, driven by factors such as increasing demand, supply constraints, and geopolitical tensions.
Deloitte's natural gas price forecasts offer additional perspectives on future price trends beyond 2028.
For 2030, Deloitte sees Henry Hub trading at $5.40/Mcf, down from $8.50/Mcf in 2022. However, the firm's forecast for 2040 suggests a reversal in this downward trend, with the US gas price expected to rise to $6.55/Mcf.
By 2041, Henry Hub is expected to trade at $6.70/MMBtu, indicating a potential recovery in prices after a period of decline. Moreover, Deloitte projects Henry Hub's prices to increase by 2% per year after 2041, reflecting a long-term bullish outlook on gas prices.
Get expert financial advice
Historical gas price data acts as a barometer for the complexities of our global economy and geopolitical landscape.
Expert forecasts offer valuable insights into gas prices' potential trajectories. By leveraging these insights, we can confidently navigate the road ahead, ensuring a smoother ride for businesses, consumers, and economies.
Don't let the future of gas prices drive you into financial uncertainty. Seek expert financial advice to steer your financial journey in the right direction.
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