EIA expects gasoline and diesel prices to fall in 2022 and 2023 as demand growth slows

EIA expects on-highway diesel prices to increase to average US$3.33/gal. in 2022 before decreasing to US$3.27/gal. in 2023. In the forecast, annual average diesel demand reaches 2019 levels in the US in 2022.

The report forecasts that slower demand growth and increasing crude oil production through 2022 and 2023 will contribute to lower crude oil and petroleum product prices. Crude oil prices are the largest driver of retail gasoline and diesel fuel prices.

In 2022, EIA expects recently reduced retail gasoline prices to continue to decline as demand growth slows. It estimates that annual average motor gasoline consumption, which fell by an estimated 1.2 million bpd in 2020, increased by 0.7 million bpd in 2021. EIA expects an additional increase of 0.3 million bpd in 2022 and before a minor increase of less than 0.1 million bpd in 2023.

The report also expects US gasoline consumption to remain below 2019 levels (9.3 million bpd) on an annual basis through the STEO forecast. However, EIA forecasts that driving trends will surpass pre-pandemic levels in 2022 and 2023, but they will be offset by continued increases in vehicle fleet fuel economy that will limit US growth in gasoline demand.

Distillate fuel oil consumption (much of which is consumed as diesel) decreased from 4.1 million bpd in 2019 to 3.8 million bpd in 2020. In 2021, EIA estimates consumption increased to 3.9 million bpd. Distillate demand is expected to return to just below 2019 levels in 2022.

Additional information on EIA forecasts for petroleum consumption, production, inventories, and prices is available in the Short-Term Energy Outlook.

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