American drivers haven't seen gas prices this favorable since the pandemic emptied highways in 2020. According to GasBuddy's 2026 Fuel Price Outlook released this week, the yearly national average price of gasoline is projected to fall to $2.97 per gallon—down 13 cents from 2025's average of $3.10 and marking the lowest yearly average in six years.

If the forecast proves accurate, 2026 will mark the fourth straight year of falling prices at the pump, delivering billions of dollars in savings to household budgets already stretched by elevated costs elsewhere.

What's Driving Prices Down

Several factors are converging to push gas prices lower:

Global Oversupply

Oil markets remain awash in crude, with production from the United States, Brazil, Guyana, and other non-OPEC producers offsetting cartel production cuts. The U.S. Energy Information Administration expects global oil markets to remain oversupplied throughout 2026.

Demand Softness

Global central banks' aggressive rate hikes in 2023-2024 slowed economic activity and dampened fuel demand. Meanwhile, the continued adoption of electric vehicles and improved fuel efficiency are structurally reducing gasoline consumption growth.

Refining Capacity

New refining capacity that came online in 2024-2025, particularly in Asia and the Middle East, has improved the global supply of refined products and reduced the premium commanded by gasoline over crude oil.

"As global central banks slammed the brakes on an overheated economy and new refining capacity came online, we've seen fuel prices ease year after year—a trend few would've bet on when chaos ruled the energy market. It's not a return to ultra-cheap fuel, but for the first time in a long time, the wind is clearly behind drivers' backs."

— Patrick De Haan, Head of Petroleum Analysis at GasBuddy

Regional Variations

Gas prices vary significantly by region, and that will continue in 2026:

Cheapest States

Ten U.S. states are forecast to enjoy yearly average gas prices of less than $2.75 per gallon:

  • Alabama
  • Arkansas
  • Kansas
  • Louisiana
  • Mississippi
  • Missouri
  • Oklahoma
  • South Carolina
  • Tennessee
  • Texas

Most Expensive Areas

California, the Northeast, and the Chicago area will remain the highest-cost markets, though even these regions should see prices well below the peaks of 2022. California's unique fuel blend requirements and higher state taxes keep prices elevated relative to the national average.

Seasonal Patterns to Expect

GasBuddy forecasts typical seasonal fluctuations:

  • Spring: Prices may briefly reach the low $3.20s during the switch to more expensive summer-blend gasoline.
  • Summer: The driving season peak typically arrives in June-July.
  • Fall: Prices are likely to fall after June as refiners switch back to cheaper winter blends.
  • December: Forecast to average $2.83 per gallon—the lowest point of the year.

What It Means for Your Budget

The savings add up quickly at the household level:

  • Household spending: Average household spending on gasoline is projected at $2,083 for the year, down slightly from 2025.
  • Aggregate savings: American motorists are projected to spend $11 billion less on gasoline in 2026 compared to 2025.
  • Monthly impact: A family filling up a 15-gallon tank weekly could save approximately $10-15 per month compared to 2025 prices.

Diesel Outlook

Diesel prices are forecast to remain elevated relative to gasoline but continue easing from recent peaks, averaging $3.55 per gallon for the year. The diesel market faces different dynamics, including stronger demand from trucking and industrial users and tighter refining margins.

Risks to the Forecast

GasBuddy cautions that 2026 will still bring "familiar bouts of volatility" tied to:

  • Hurricane season: Gulf Coast refining capacity remains vulnerable to tropical storms.
  • Geopolitical risks: Tensions in the Middle East or disruptions to Russian supply could spike prices quickly.
  • Refinery maintenance: Unplanned outages can temporarily tighten regional supply.
  • OPEC+ decisions: The cartel could cut production more aggressively if prices fall too far.

Despite these risks, the overall trend is clear: 2026 looks to be the most driver-friendly year for gas prices since the pandemic. For American households dealing with still-elevated costs for housing, food, and insurance, relief at the pump provides a welcome offset.