Petroleum products

U.S. gasoline consumption
We now forecast a slight increase in U.S. gasoline consumption in 2026, in contrast to our previous forecasts that anticipated a decline in gasoline consumption. Two reasons contributed to the change: a revision to the working-age population and year-over-year falling gasoline prices.

In June, the U.S. Census Bureau released revised historical data on the U.S. population by age, increasing the working-age population (ages 15–64) by about 500,000 people and decreasing the over-65 population by about 900,000 people. These adjustments are incorporated into our 2026 forecasts. Because our forecasts assume that the working-age population drives more than those over the age of 65, we now forecast a 0.7% increase in vehicle miles traveled in 2026, up from only a 0.2% increase in the August STEO. This higher driving activity increases gasoline consumption.

Lower gasoline prices also affect our gasoline consumption forecast. Although gasoline generally has a low price elasticity of demand—meaning price changes do not affect consumption meaningfully—the large forecast drop in gasoline prices next year translates into small increases in consumption. Our forecast models estimate gasoline price elasticity of around -0.01 to -0.02, meaning that a 25% decline in gasoline prices would lead to around 0.25%–0.50% increased gasoline consumption. Combined with the higher working-age population, the overall effect is for U.S. gasoline consumption forecast to increase 0.3% next year.

U.S. gasoline expenditures
Falling gasoline prices next year result in our forecast for U.S. drivers’ gasoline expenditures as a share of disposable personal income to be the lowest since at least 2005, excluding the pandemic year of 2020. Since 2022, gasoline prices have declined every year, whereas disposable personal income increased by a compound annual growth rate of 4% from 2022 through 2024. Because gasoline is often a necessary household expenditure, falling prices combined with rising incomes allows for increased consumer spending on other necessities, leisure, or both.

Personal disposable income represents individual or household income after federal, state, and local taxes. We calculated our gasoline expenditures forecast by multiplying our all-grades retail gasoline price by our forecast for annual gasoline consumption. Our forecast for disposable personal income comes from the S&P Global Insights U.S. macroeconomic model. Because gasoline prices, consumption, and personal disposable income are highly uncertain and subject to many different economic forces, our current forecast could be significantly different if any of these variables change this year or next.

We forecast regular-grade gasoline prices will average around $2.90 per gallon in 2026 and gasoline consumption will average 8.9 million b/d. Forecast expenditures will average less than 2% of disposable income and will differ across the United States depending on region, household income, and driving habits. Households with older, less efficient vehicles, those that drive more, or those in regions of the country with higher gasoline prices, will spend more than those households with more efficient vehicles, those that drive less, or those in regions with lower gasoline prices.