Across the country, Americans may see lower gas prices at the pump in 2022.
On Tuesday, the U.S. Energy and Information Administration projected that retail gasoline prices would average $3.13 per gallon in December before falling to $3.01 per gallon in January.
The EIA expects prices to continue to drop, forecasting the annual, national average to be $2.88 per gallon in 2022.
To put the incoming estimates into perspective, according to the EIA:
- November U.S. retail gasoline prices were the highest seen since September 2014.
- At an average of $3.39 per gallon in November, prices at the pump increased by 10 cents per gallon since October and $1.29 per gallon since November 2020.
- The annual average for 2020 was $2.18 per gallon, in comparison to $2.60 per gallon in 2019 and a projected average of $3.00 for 2021.
Anxiety over the omicron variant of the coronavirus and reductions in fuel consumption drove the price drop, Patrick De Haan, head of petroleum analysis for GasBuddy, told the Associated Press. GasBuddy is a tech company that provides real-time gas price information for over 150,000 stations nationwide.
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The EIA stressed that its December projections remained subject to uncertainty related to the ongoing COVID-19 pandemic, notably the emergence of the omicron variant, which heightens unknowns about the level of energy consumption around the world in the near future.
“This is a very complicated environment for the entire energy sector,” EIA Acting Administrator Steve Nalley said in a statement. “Our forecasts for petroleum and other energy prices, consumption, and production could change significantly as we learn more about how responses to the Omicron variant could affect oil demand and the broader economy.”
Still, Nalley maintained that decreases in prices at the pump over the next year are expected, due to the EIA’s forecast for increased crude oil production. Total U.S. crude oil production is projected to rise to an average of 11.8 million barrels per day in 2022.
Contributing: The Associated Press