EIA: U.S. Retail Gasoline Prices Drop in 2025 for Third Year

Written by Paul Wiseman for IIR News (Sugar Land, Texas)

Summary

Greater supply of crude and refined products led to a third consecutive year of lower pump prices for U.S. drivers in 2025, according to the EIA. Production is forecast to grow even more in 2026.

Plentiful Supply Means Lower Retail Prices

Global oversupply of both crude and oil refined products led to a third consecutive year of lower pump prices for gasoline in 2025. That's according to a report from the U.S. Energy Information Administration (EIA).

The 2025 average pump price for regular grade gasoline in the U.S. dropped by $0.21 per gallon, hitting $3.10. This slide in prices began in 2023, following 2022, when gasoline prices hit their highest level since 2014.

Russia's 2022 invasion of Ukraine sent oil markets into a short-term period of uncertainty, inflating crude prices during the first half of that year, followed by a year-end correction.

Said the EIA in an earlier report on 2022 prices, "The price hit its 2022 high at $5.01 per gallon in June 2022, before decreasing to $3.09/gal at the end of the year," which for that short time was lower than 2025's total year average.

Industrial Info's Vice President of Energy Services Jesus Davis agreed with the EIA's market evaluation: "In 2025 we saw generally weak gasoline demand globally, combined with an ample supply of refined products, including gasoline. There was also an ample supply of crude on global markets."

He continued, "And for once, there were no major disruptions of refining capacity besides normal seasonal turnarounds and maintenance."

That stability has kept refineries running in high gear, added Industrial Info's Senior Director, Energy Market Intelligence Hillary Stevenson. Also, "U.S. refining capacity has decreased with the closing of refineries in California. In 2026, refinery maintenance is expected to be even lower, year-over-year, which will further boost refinery utilization percentages by reducing downtime."

She added, "So far we have not seen any refinery rate cuts due to low-price economics."

The Roads Less Traveled?

The EIA said gasoline consumption in 2025 was down by less than 1% on an annual basis from the preceding year. But Stevenson noted that the American Automobile Association (AAA) saw an increase in car travel of 2% in 2025 compared to the year before.

Prices on last year's Memorial Day Weekend, the traditional start of the summer travel season, "were at their lowest since 2020, when adjusted for inflation," the EIA reported.

What's Next--OPEC + to Up Oil Output in 2026?

Stevenson said that a possible return of some OPEC+ temporary crude oil cutbacks could impact oil prices. Earlier this week eight members of OPEC+ (Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria and Oman) met virtually and decided to stick with their November 2025 decision to delay returning 1.65 million barrels per day of production, at least for now. That return had been planned for February/March, but the pause will let them re-evaluate for seasonal use patterns.

That reduction began at 2.2 million barrels per day in November of 2023, and has been adjusted since then. The group is promising to hold monthly meetings this year to continue monitoring the situation.

"This is certainly a situation for uncertainty in market pricing," Stevenson commented.

At $3.24/gal, 2025's highest yearly gasoline price was significantly less than the 2024 high of $3.67/gal. Both numbers were reached in April of their respective years. After the high, "Retail gasoline prices decreased to an annual low of $2.81/gal in late December, as low crude oil prices combined with declining crack spreads at the end of November," the EIA said.

The EIA is predicting 2026 U.S. oil production to drop by about 100,000 BBL/d due to lower prices. If this happens, it would break a four-year string of yearly increases. Worldwide, the EIA sees supply growth of about 1.3 million barrels per day, which would outpace demand growth by .2 million barrels.

The agency's Short Term Energy Outlook (STEO), from which those numbers were taken, was issued before the U.S. capture of Venezuelan President Nicolás Maduro and his wife--an action which U.S. President Donald Trump promises will release more oil from that nation.

By the Numbers

• $3.10/gal: average U.S. retail gasoline price in 2025
• $3.24/gal: highest average price in 2025, reached in April
• $3.31/gal: average U.S. retail gasoline price in 2025

And with eight OPEC+ nations mulling the return of 1.65 million barrels per day of withheld production in 2026 combined with a slight drop in worldwide demand, gasoline pump prices could slide further.

Key Takeaways

• After a 2022 price/supply panic upon Russia's invasion of Ukraine, crude oil prices have generally declined, leading to a three-year series of retail gasoline price drops in the U.S.

About Industrial Info Resources

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).