By on December 23, 2014

Fuel Price Circa Mid-December 2014

With fuel prices still falling as of this writing, the U.S. Energy Information Administration issued a report forecasting an average of $550 in savings at the pump for a typical family in 2015.

The new average cost in gasoline expenditures for 2015 is expected to hit $1,962, the first time said spending fell below $2,000/year since 2009.

As for what people are likely to do with their $550 that would have gone into the tank, the EIA believes that savings will go into “other goods and services, pay down debt, and/or increase savings.” The agency also noted that demand is “very price inelastic over short time periods,” as consumers will fill their tanks to as much as they see fit despite how much a gallon is priced.

Down on the trading floor, the EIA expects Brent crude to average $68/barrel in 2015, while West Texas Intermediate will land around $63/barrel over the same period. Increases in fuel economy and U.S. oil production, as well as OPEC’s decision to hold the line regarding its own output, are contributing to the forecasted savings, as well.

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33 Comments on “EIA: US Average Fuel Savings Climb To $550 In 2015...”


  • avatar
    BunkerMan

    I think I’ll be in the above average category this year. I fill both of my vehicles once per week. This morning I saved roughly $30 on a fill-up over what I was paying in the summer. That was in my car and my truck is getting close to $40 off per fill. $70 extra per week is welcome around Christmas.

    Prices may not stay at current levels, but I’m just happy to see sub-$1 per litre prices (Atlantic Canada). I didn’t think I’d see that again.

  • avatar
    SaulTigh

    Put 25.7 gallons of 87 octane into the truck two night ago for LESS than $50. Fantastic!

  • avatar
    sportyaccordy

    I was going to get rid of my Z to save gas money (and get something more practical). Now I’m confused. I still need something more practical. But with gas plummeting that is almost not even a consideration anymore. So I’m torn between something like a 330i and a Civic Si.

    • 0 avatar
      focus-ed

      I don’t get that shortsighted point of view. It’s less expensive now but far from free (and already there’s the talk of increasing prices later on in 2015).
      Considering that Americans should be cultural descendents of Puritans it’s strange to see all the excess, love of gas guzzlers or simply put inability to make thrifty/frugal choices.
      To save a $ or not to save a $ is 2$. Now multiply this by number of fill-ups per year. I would cry if I had to fill up that 25 gallon tank in a truck somebody else mentioned (no matter that price at the pump). I’d rather keep that money in my pocket.
      BTW, you could have considered worse options than “330i and a Civic Si” in the light of recent market trends in US. Whatever is your pick go with 6 speed MT.

  • avatar
    SCE to AUX

    It’s nice to have an EV and a hybrid in the fleet, and to use the minivan only sparingly these days – as far as fuel prices are concerned.

    Funny how fuel prices are only discussed when the price is changing.

  • avatar
    Type44

    Always thought the whole “the economy sucks” thing is 100% self-perpetuating. I think we are going to see that there is NOTHING that stimulates a consumer-driven economy like people FEELING richer. you heard it here first!

  • avatar
    S2k Chris

    Wish they’d get the premium for, uh, premium back in the $.20 range. This whole $.50-$.75 surchage stinks. And all three of my cars recommend/require premium (and get better mileage when I use it vs. regular).

    • 0 avatar
      carguy67

      In San Jose, CA there is a local distributor/station owner called ‘Rotten Robbie;’ named after its founder, a gent named Robinson. They’ve always sold all 3 grades with a dime difference; e.g. $2.79 for regular, $2.89 for ‘plus’ (89 octane) and $2.99 for premium (91 octane). Always thought that was reasonable and fair (they’re usually just a couple cents more than Costco, and no fighting crowds and waiting in line for 30min.).

    • 0 avatar
      krhodes1

      Varies wildly by locale. Here $.20 spread is not unusual, with some places at most at $.30. Of course, our prices are still over the national average by a good bit for regular. Diesel is only about $.50 more than regular at the moment at most stations.

      I paid $1.92 in Dallas last week, which was refreshing, for what little it actually matters to me.

  • avatar
    Land Ark

    I’m still waiting to see all the prices that went up this spring due to high gas prices come down.
    http://www.marketwatch.com/story/consumer-prices-edge-up-in-february-as-food-prices-jump-2014-03-18
    I suspect they will ease a bit but why lower prices when people will still buy the stuff anyway?

    “As for what people are likely to do with their $550 that would have gone into the tank, the EIA believes that savings will go into ‘other goods and services, pay down debt, and/or increase savings.\'”

    LOL!!! Pay down debt? That’s not how this economy works. $550 spread out over a year will do absolutely nothing for the common consumer. That’s an extra $10.50 a week (the most common frequency that people get gas). Most folks won’t even notice and it’ll be gone as soon as they get it.

    • 0 avatar
      krhodes1

      Some people will see a big gain – folks doing long commutes in pickups. Some will see very little – short commute in a Prius. Given the popularity of relatively gas sucking vehicles in this country, there are a lot of people saving a lot of money at the moment. Me, meh, whatever. I work at home, or commute 6 miles to an airport a couple times a week. Even in my gas sucking winter-beater Range Rover, it makes very little difference. $40 fill ups are better than $80 fill ups, but at most a couple times a month who cares?

      For me, the big thing is that heating oil is down almost $2/gal vs. the peak prices of the past few years – and given it is bought 150 gallons at a time instead of 20 you really, really notice it. I spend a lot more of my own money on heating oil than I do on gas every year, and that demand is even more inelastic than gas is. You can only turn the thermostat down so far before the pipes freeze in the old shack.

      For me, the difference does go into paying down debt. Whatever is leftover at the end of the month goes on the mortgage.

    • 0 avatar
      jrmason

      Gas does not drive the price of goods up or down, #2 does and it is still well over $3 a gallon in most of the country.

      • 0 avatar
        VoGo

        Both gas and diesel come from the same source, which is oil. As do many fertilizers that figure into the price of food, plastics that figure into the prices of so many goods, from computers to dishwashing soap. Lower oil prices are going to be a primary driver of improving profits for most industries and lower prices for consumers.

        • 0 avatar
          jrmason

          And yet gasoline is virtually the only product of crude that has dropped (or dropped this drastically). Gasoline outsells diesel around 3 gallons to 1 in the US and given the flooded market why hasn’t diesel dropped similarly as gasoline? Think its got anything to do with the primary consumers of diesel fuel? (Transportation, construction, agriculture, distribution, etc)

  • avatar
    APaGttH

    It’s been very fascinating watching the price of WTI these last few weeks. It is showing very good support at $56 a barrel, which I had wrote was the threshold to “crash” territory.

    The question is can it sustain? US GDP rose 5% in the previous quarter (it will surely get adjusted down next quarter but that is still red hot growth) and with improving GDP comes increased energy consumption. The slack in the market may get slurpped up over the coming 18 to 24 months – interesting times.

  • avatar
    an innocent man

    I’ve long been told that deflation is bad for the economy, as people put off purchases in expectation of further price decline. I now believe this to be true, as I’ve run out of gas six times in the last month waiting on prices to drop further. I pray that this madness ends soon.

    • 0 avatar
      SCE to AUX

      Kidding aside, it will be interesting to see if the increased economic activity due to low fuel prices is eventually offset by cheaper goods and possibly lower revenues, and finally, flat wages. Nobody wants flat wages.

      The Fed can’t reduce interest rates much further, so cheaper fuel is a fascinating alternative stimulant for the economy which could have some unpleasant side effects.

    • 0 avatar
      jrmason

      Look up the definition of insanity.

  • avatar
    energetik9

    The problem with a claim like this is that the model assumes no change in behavior. We all know that some people will drive more, and some people will purchase autos with less weight placed on MPG criteria. That’s not to say that many won’t see actualized savings. In economics terms it’s called “induced demand”. In short, cheaper gas results in more people using that resource or using it more often. I would bet that there are more gallons of gas being sold right now.

  • avatar
    carguy67

    From today’s ‘TheStreet.com:’

    “Our rule of thumb is that each penny change in the price of a gallon of motor fuel saves or costs consumers $1 billion over the course of a year.”

  • avatar
    DearS

    We need to continue to encourage more fuel efficient and reliable cars into the market like we have been doing! I’m looking at saving over $1000 after switching to my Accord from my enthusiast focused BMW, and with these prices vs. last year. That would have been 7% of my income last year. It’s closer to 3.5% this year which is still substantial. I am saving 20% on fuel costs with my Accords fuel economy and another 40% with these fuel prices, and probably another 50% on repair costs. That is around 20% of all my income (~$16k after taxes) from last year that is going back into the economy! I have already gone on two vacations overseas, got a newer car, paid for community college, got a better job, saved some money and started planning my home theater system! Imagine if I lived in a third world country, the savings would be even bigger! The cars we buy and how much fuel we use affect others too!

  • avatar
    ckb

    I wonder how that compares to the inevitable gas price increase once the Saudis cut production after the frackers shut down and before they have time to start up again…

    • 0 avatar
      APaGttH

      No one is blinking or budging in this stalemate.

      It’s pretty amazing – the power of the OPEC cartel is being tested, and at the minimum, some cracks are forming.

      • 0 avatar
        jrmason

        Its not going to last much longer. Many of the frackers have been locked in to contracts at much higher prices but once the contracts are up and renegotiations commence, the big boom will be over.

  • avatar
    AoLetsGo

    What really stinks is I would seriously consider a diesel Cruze right now – the 2014’s are up to $6k off. But a gallon of oil is $1.59 higher than gas locally, the difference used to be only $.20!!

  • avatar
    Type44

    Reality vs. conjecture: Diesel here is $2.53. It’s coming down, folks. That is pre-Katrina pricing. I’ve never bought diesel under $3 since buying my 300SD ten years ago.

    I am not a macro thinker nor am I an economist, but I have yet to see how giving $50-100 to every driver in America every month is able to meaningfully depress wages. It’s made parking at the mall damn near impossible this week, and tables hard to get at my favorite eatery, but I just don’t see your conclusion…

    • 0 avatar
      jrmason

      The prices your talking are the exception not the rule. National average is more than .70 higher, and many places are more than that. I paid $1.10 a gallon more than that yesterday. If your in Katrina territory, that ‘splains a lot.

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