Predicting the Pump: How Much Will We Be Paying for Gas in 2018?
Fueling prices and average economy aren’t exactly the sexiest of automotive topics, but they are the two that will probably influence your life the most directly in the coming year. Expensive gas thrusted countless Americans into economy cars during the early 1980s and 2000s, so any advanced warning would be useful to those considering a new vehicle this year.
Last month, crude prices surpassed $60 per barrel after weekly American output dipped and stockpiles fell. That’s the highest they’ve been in over two-years and, with OPEC cutting production and China hungrier for the black stuff than ever before, prices aren’t expected to drop anytime soon. Does that mean you should nix purchasing that big sport utility vehicle you’ve been eyeballing and option the greener alternative?
Not necessarily and, if you do, you’ll certainly be in the minority. The University of Michigan Transportation Research Institute, which tracks average fuel economy, noted that new cars and light trucks sold in the U.S. in December lost 0.2 mpg from November — resulting in a leaner 25.0 mpg mean.
Despite manufacturers improving fleet-wide efficiency for years, consumer preference has left average economy hovering around the low 25 mpg range since 2014. With car deliveries down 17 percent against last year, sales of less gas-friendly options like crossovers and trucks have grown.
Of course that could change if there were a sudden surge in fuel prices. Gas prices are up slightly from last year, by about $0.12. GasBuddy’s fuel price outlook for 2018 is also anticipating the United States is about to spend $25.4 billion more on fuel in 2018 than it did in 2017.
Fortunately, that translates to a fairly modest increase per household. If you didn’t notice gasoline prices creeping up in 2017 then the odds are good you won’t notice them in 2018. The projected average for the entire year is expected to be around $2.57 per gallon (with diesel at $2.70 a gallon). Obviously, the final sum will ultimately depend upon where you pump. But even those that choose to reside in California, where gas is always a bit pricier, should be safe from four-dollar fuel this year.
Keep in mind that this is all speculative. The refinery responsible for your region may encounter an unprecedented disaster or Texas could get hit buy another queue of hurricanes — forcing an extended shutdown and creating a temporary gas shortage.
However, 2018 looks to be on track for a relatively modest increase in fuel prices that shouldn’t deter anyone from wanting to lease an utter gas-hog. But buying may be slightly less advisable. Let’s not forget that the International Energy Agency predicted a 75-percent increase in oil prices by 2020 and expects it to skyrocket from there as global demand increases. The good news is that it revised its short term outlook, meaning 2018 could be a little easier on the wallet with fewer ugly surprises. Although that doesn’t mean subsequent years will be nearly as kind.
While it may not spell-out disaster, especially if the world energy outlook follows all of those green initiatives governments are so keen on and electric vehicles become the dominant mode of transport (powered by nuclear or renewable energies), there remains the real probability that fuel prices will progress in an upward trajectory over the next two decades. We’d advise shopping for the vehicle you want and then considering what your gas-budget might look like a few years down the line.
Kenwood on Jan 08, 2018
Are you kidding? It's going to be "Drill baby, drill!" for the next 3 years (hopefully 7). The so called experts have only been experts at getting things wrong. Remember how the markets were supposed to crash last year? This administration is rolling back regulations like a mo' fo' and many opportunities for drilling are opening and re-opening. Oil will be flowing like booze like the day after prohibition. Gas will once again be cheap and plentiful. (Thanks Trump)
Gasser on Jan 08, 2018
Yesterday at Costco in Los Angeles: regular $2.95/gal and super at $3.15/gal. My guess is $.50 more per gallon by year end, UNLESS we have one of our frequent refinery outages (due to "fire", "maintenance", "refurbishing" or "labor issues") This will raise gas $1 per gallon. Enjoy the golden age of cheap gas and 500 hp while we can.
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