U.S. retail gasoline prices in 2023 averaged $0.43 per gallon (gal) less than in 2022, according to data from the U.S. Energy Information Administration’s Gasoline and Diesel Fuel Update.
This decline was due, in part, to lower crude oil prices in 2023 compared with 2022 and higher gasoline inventories in the second half of 2023. Compared with the last weekly average price snapshot of 2022, prices during the last week of 2023 were about even, up only $0.02/gal.
The U.S. retail price for regular-grade gasoline, the price consumers pay at the pump, averaged $3.52/gal in 2023. The price hit its 2023 high of $3.88/gal in mid-September, well below the previous year’s high of $5.01/gal in June 2022. Prices decreased to $3.05/gal at the end of 2023.
The lower relative gasoline prices primarily reflect lower crude oil prices in 2023 compared with 2022. Gasoline prices rose quickly after Russia’s full-scale invasion of Ukraine in February 2022 and the resulting uncertainty in markets for crude oil, natural gas, and petroleum products such as gasoline. Annual average gasoline prices in 2022 were the highest since 2014, when adjusted for inflation.
The higher gasoline prices in August and September 2023 were caused by more relative demand for gasoline at the end of the summer driving season, combined with lower refinery production amid seasonal maintenance and low inventories. Gasoline inventories were the same as or lower than those in 2022 for most of the first half of 2023. Prices dropped from $3.80/gal at the start of October, when refinery operations began to resume, to $3.40/gal at the start of November, an 11% decrease ($0.40/gal).
U.S. gasoline prices vary regionally, reflecting local supply and demand conditions and differences in state fuel specifications and taxes. The annual average retail price for regular-grade gasoline in 2023 ranged from a low of $3.09/gal on the U.S. Gulf Coast to a high of $4.51/gal on the West Coast. East Coast gasoline prices averaged $3.40/gal last year. Midwest prices averaged $3.36/gal, the second lowest after the Gulf Coast, and Rocky Mountain prices averaged $3.60/gal. As with overall prices, prices in each region decreased compared with 2022.