What Will Happen to Gas Prices in 2024?
Written by
Brooke Barley
Edited by
Joe Evans
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Though gas prices going up is just an expected reality these days, U.S. retail gas prices were down from 2022 to 2023. Overall, prices were $0.43 less in 2023 than in 2022 on average. Reasons for this include lower prices for crude oil and more availability of gasoline as a whole. The average price consumers paid for gas in 2023 was $3.52 per gallon, hitting a high of $3.88 on average.
As of March 2024, the average gas price is around $3.40 in the U.S., with Southern states seeing prices closer to $3.00. This is a slight reprieve from 2023 — and certainly 2022 — prices, but will it last? How will gas prices change during 2024? GOBankingRates reached out to auto and gas experts to get their takes on how much it will cost to fill up your tank.
Read on to see what experts say will affect the price of gas in 2024.
Economic Landscape
Gas prices are very dependent on the state of the economy. Mark Beneke, an owner of Westland Auto, Inc., said that even though our economy might not be the best it’s ever been, that’s good news for gas prices.
“I believe we should see a slight decrease in gas prices this year for a few reasons. One is that we are currently in an economic downturn, which typically leads to reduced demand for fuel. The less demand there is, the lower the prices,” said Beneke.
Beneke added that more refineries are coming online, producing more oil and creating more storage, leading to an increased supply and lower prices.
Election Effect
With 2024 being an election year, Matt Willer, a private asset investments expert, feels gas prices will be affected by who wins in November.
“A Republican administration will likely soften prices because those administrations will support more domestic drilling, hence more supply and lower prices. A Democrat will likely lead to the opposite,” said Willer.
However, don’t expect prices to wildly fluctuate between now and the election. Willer said they’ll stay pretty close to what they are now until the results are in.
“Expect a tight range until we are closer to the election unless an abrupt supply disruption transpires or China demand picks up in a hurry,” said Willer.
Electric Vehicles
Electric vehicle sales hit a new high in 2023. A record 1.2 million EVs were sold during 2023, and they’re expected to reach 10% of the market share this year. An increase in drivers switching to electric vehicles means less need for gas, increasing supply. This won’t mean a huge drop in gas prices now but might in the coming years.
“The shift toward more fuel-efficient vehicles and electric vehicles leads to even less demand for fuel,” said Beneke. “This should lead toward a small decrease in cost this year, but eventually grow much bigger as the demand decreases further.”
Regional Uncertainty
Willer said that, ultimately, oil and gas prices are driven by supply and demand economics. One factor that affects those economics is global unrest.
“Regional uncertainty, like that in the Middle East, Russia and Ukraine, is being monitored for supply disruption purposes, and any abrupt tightening of supply is going to be factored into oil prices and, ultimately, all of the derivatives, including gas,” said Willer.
Willer said disruption manifests in oil shipping lanes, channels or sanctions. Any complications in the facilities also affect oil and gas quality, thus leading to a shortage. In turn, this drives up prices. However, Willer said that prices have leveled out for now.
“Demand is near peak, but you have some economies still coming back from COVID and from the inflationary slowing, which has kept prices relatively stable and reasonable,” said Willer.
Population Increase
More people means more demand for gas, but it shouldn’t cause a dramatic effect during 2024. “Ultimately, population increase will continue to elevate demand, but supply seems equipped to keep up, and that lends itself to a stable and orderly market,” said Willer.
He added that the only way we would see an extreme jump or drop in gas prices is due to catastrophic events like pandemics, wars, and the like. “Wars disrupt the production or supply chain and easily disrupt the expected flow of things,” said Beneke. “Especially if the war is involving a country that produces and exports large amounts of fuel.”
Without a huge disruption, experts say gas prices are basically projected to stay the same until the election. Enjoy slightly lower prices while you can.
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