“Our forecast for generally lower retail gasoline prices over the next two years follows an ongoing trend of falling gasoline prices since reaching a historical high point of $5/gallon in mid-2022. On a nominal basis, we estimate the 20 cents-per-gallon decrease in 2026 will be comparable to price decreases in 2024 and 2025,” the agency said.
The biggest factor determining the price of retail gasoline is crude oil prices. Over the past 10 years, crude oil prices have accounted for slightly more than 50 percent on average of the retail average gasoline price. In 2026 and 2027, this share is expected to dip below 45 percent, the EIA said.
The EIA is expecting crude oil supplies to continue outpacing demand globally this year, with prices declining to their lowest annual average since 2025.
Gasoline crack spreads—the difference between crude oil prices and wholesale gasoline prices—is projected to be wider in 2026 than in the previous two years, the agency said. Crack spreads serve as a measure of refinery profitability.
As for regional trends, the EIA projects gasoline prices to fall in every region this year and increase in the next.
“Despite that expected increase, 2027 average gasoline prices remain less than 2025 averages in every region except the West Coast (PADD 5), where we expect the upcoming loss of refinery capacity will contribute to relatively higher gasoline margins and gasoline prices that are about equal to 2025, in nominal terms,” the agency said.
“The West Coast region typically has the highest gasoline prices in the country, and we expect that trend to continue through 2027. We expect the Gulf Coast region to maintain the lowest gasoline prices through the forecast, followed by the Midwest.”
High prices on the West Coast are due to several factors, including state taxes and fees, stricter environmental requirements, special fuel requirements, and limited pipeline connectivity.
In 2025, U.S. oil output hit a record high of 13.6 million barrels per day, a trend that is expected to continue this year, the department said, adding that this has contributed to lower gasoline prices for American drivers.
The Trump administration’s pro-crude oil policies have attracted criticism.
DOE’s external communications reveal several requests for meetings and favors from entities in the oil and gas sector, it said. One of the requests involved the American Petroleum Institute seeking a tariff exemption for crude oil, methane, and refined products, the group said.
“To date, the agency’s actions have primarily benefited big industry and corporate polluters—all at the expense of the health and security of our people and planet,” said Elena Saxonhouse, the Sierra Club’s managing attorney.
“That should concern us all. While we’re encouraged to begin to see some level of transparency being provided as a result of our efforts to hold this administration accountable in court, we won’t stop fighting back.”
The Epoch Times reached out to the Energy Department for comment but did not receive a response by publication time.
Despite the criticism, the administration is pushing ahead with boosting the country’s energy industry.
The council urged Congress and federal agencies to build new energy infrastructure while improving and expanding existing facilities.
“The National Petroleum Council’s findings confirm what President Trump has said from day one: America needs more energy infrastructure, less red tape, and serious permitting reform,” Energy Secretary Chris Wright said.
“These recommendations will help make energy more affordable for every American household.”
