Gas prices expected to drop below $ 3 in 2022 – Forbes Advisor

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Finally, there are federal guidelines on when gas prices should drop. And it’s sooner than you might think.

The national average price of gas is $ 3.34 per gallon, according to the US Energy Information Administration, more than a dollar more than at the same time last year.

And while prices remain high, they’re lower than they were just a few weeks ago, and more relief is on the way. The U.S. Energy Information Administration’s (EIA) short-term energy outlook forecasts that retail gasoline prices will drop to $ 3.01 per gallon in January, ultimately reaching $ 2.88 per gallon in January. average over the year.

If you need help dealing with rising gas prices in the meantime, there are ways to save money.

How to save money on gasoline

Here are 4 tips for saving money while refueling:

  1. Use the gas apps to find cheap gas near you. There are a handful of useful apps that will show you nearby gas stations and real-time gas prices. GasBuddy, for example, allows users to update nearby gas prices and lets you search by current location, zip code, or city. GasBuddy also offers a free reward card for users that offers discounts on gasoline. The card is directly linked to a checking account and is sent by post. According to the GasBuddy website, swiping the reward card and that gas pump can save users up to 25 cents per gallon at the pump. GasBuddy makes money selling likes and dislikes of customer data to station operators, according to USA Today.
  2. Sign up for gas rewards programs. Those with a preferred gas station chain can benefit from signing up for its rewards program. These programs reward loyal customers by offering them discounts every time they refuel. Exxon Mobil Rewards + rewards three points per gallon on fuel and two points for every dollar spent at convenience stores and car washes. Each 100 points redeemed will provide $ 1 reduction on your purchase; up to 5,000 points redeemed at one time, for a total of $ 50 in savings.
  3. Take advantage of grocery store rewards programs. Many grocery chains have loyalty programs that offer rewards for gasoline. Kroger’s Fuel Point Program provides one fuel point for every dollar spent at Kroger stores. Buying gasoline at Kroger gas stations offers the best trade-in value of up to 1,000 fuel points for $ 1 off per gallon; at participating Shell stations, 100 points can be redeemed for 10 cents per gallon. There is no limit to the number of Fuel Points that can be earned each month, but they expire on the last day of the month after being earned. So make sure you use them every month to maximize your discount.
  4. Buy gasoline with a cash back credit card. Responsible use of the credit card can also be rewarded at the gas pump. Some credit cards have specific expense categories with high percentage cash back rewards, including gasoline. Make sure you pay off your credit card balance in full each month to avoid additional charges to cover interest. Check out our picks for the best gasoline credit cards in October 2021.

Why are gas prices so high?

The high demand for crude oil and the low supply of it are pushing gas prices up.

Crude oil, the natural resource used to produce gasoline and diesel fuel, has seen dramatic changes in its supply throughout the pandemic. When Covid-19 first hit the world and fewer people were on the roads, the big oil companies cut back on their oil production.

Now, with the restrictions lifted and more people going to the gas pump, the supply is not enough to meet the demand. OPEC + members were expected to reach a deal in October to produce more barrels, but instead chose to maintain current production rates.

President Joe Biden decided to release millions of barrels of reserve last month to bring prices down. The EIA attributes its decision, along with a lowered oil consumption forecast due to the Omicron variant, to its forecast for lower prices, but it also warns that those projections could change.

Gas prices were already turbulent before OPEC + ‘s reluctance to increase production. In April, the Colonial Pipeline, the country’s largest pipeline, was the target of a cyberattack that forced it to go offline for six days. The shutdown led to gas shortages nationwide and pushed average prices above $ 3 before Memorial Day when they were set to rise.

A breach and spill in a key pipeline that supplies fuel to the southeast occurred on October 1, and repairs were slowed by heavy rains and flooding.

The combined consequences of these scenarios mean that states across the country are seeing gas prices rise. The average gas price per gallon in California is $ 4.68, and that in Nevada currently sits at $ 3.89.

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