If GasBuddy’s predictions are correct, you will be spending more on gas in 2017 than you have during the past few years.
GasBuddy on Wednesday released its fuel outlook for the year ahead, and while prices will likely be up – including $3 per gallon in some cities – we won’t be seeing the nationwide averages of more than $3.50 that we saw in 2012.
GasBuddy is projecting a U.S. average of $2.49 per gallon for 2017. That is an increase of 36 cents over the 2016 average, which was the lowest we’ve seen in recent years.
[THE REPORT: GasBuddy Fuel Price Outlook 2017 (19-page PDF file)]
“While the return to cheap gas last year may have felt as long coming as the Cubs bringing home the pennant, low gas prices usually don’t last as long as we’d like,” Patrick DeHann, a senior petroleum analyst for Gas Buddy, said in the company’s report. “Unfortunately, as OPEC as [sic] tightened their grip on oil prices, Americans will be spending over $50 billion more this year on gasoline versus last, and unlike the Cubs winning the World Series, it may be years before some of the low prices we saw in 2016 come back.”
DeHaan described 2016 as “absolutely the year of cheap gas.” Now that 2017 has arrived, those days are gone.
“[W]hile we’re unlikely to see record setting [sic] highs, we will see more cities with gas prices rising to their highest in three years,” he said.
GasBuddy did not just predict a national average for each month, it also provided a peak daily average gas price for several cities, including Phoenix. Plan on paying between $2.70 and $3.05 per gallon, with the highest average prices hitting in the spring and summer months.
The EPA-mandated seasonal switch from “winter blend” to “summer-blend” will bring a spike at the pump later this winter and spring, according to GasBuddy.
Still, GasBuddy’s projections are just that – projections. Tax changes, volatility in the Middle East, weather, shipping issues, refinery maintenance schedules, unplanned refinery outages and currency fluctuations all play a part in determining gas and diesel prices.
“The list of factors being mixed into the yearly forecast has never been larger,” DeHaan, who has been called one of the most accurate fuel forecasters in the country, said. “This year will see a new administration take over, perhaps the most oil-friendly in some time, and with so many unknowns in regards to policy changes, we’ll be keeping a keen eye on such along with taxation changes. But forecasting fuel prices, especially this year, remains a challenging balance of science and art.”
Higher gas prices can be tough for consumers to swallow as they plan their personal budgets, particularly in a struggling or uncertain economy.
“[T]he increases we anticipate this year may be met with less resistance than in the past if economic improvement softens the blow,” Gregg Laskoski, another of GasBuddy’s senior petroleum analysts, said in the forecast report. “If the Trump Administration delivers on it promises; lower taxes, more jobs, higher salaries and savings … then a concurrent increase in demand and gasoline prices may be easier to digest.”
According to the GasBuddy forecast, we Americans will spend $355 billion on gas in 2017, an increase of $52 billion over 2016.
“That’s a considerable jump given that motorists saved $39 billion on gasoline in 2016 versus 2015,” according to GasBuddy.
With the yearly average per-gallon gas price expected to be 36 cents higher this year, now might be the time to consider a fuels points or loyalty program to save when you fill up.
“In recent years the ‘price at the pump’ continues to garner more media attention serving as an economic barometer on Main Street that stirs opinions from a broad swath of consumers from coast to coast,” Laskoski explained. “Forecasting the direction of that ‘barometer’, [sic] the potential trouble-spots and how the trends are likely to translate into dollars and cents affords us the opportunity to share insights that help everyone save money, even when prices are climbing.”
[ONLINE: GasBuddy fuel insights for Arizona]