Drivers should not expect much relief at the pump before the end of the year. In its Short-Term Energy Outlook released October 6, the Energy Information Administration forecast that regular gasoline will average $4.15 a gallon in the fourth quarter of 2026, close to the $4.11 it averaged in the third quarter. The agency expects prices to come down next year, to an average of $3.56 for 2027, but that is higher than it predicted a month ago.
The forecast lines up with what drivers are paying now. AAA's national average for regular was $4.37 on October 7, down from $4.43 a week earlier but $1.25 above the $3.12 of a year ago. The EIA's own weekly survey had regular at $4.354 on October 5. September averaged $4.35, according to the outlook, after prices rose sharply during the month.
Why the forecast went up
Crude oil drives the outlook. The EIA said Brent crude averaged $114 a barrel in September, $23 more than in August, after attacks on oil infrastructure and tankers around the Middle East, including Saudi Arabia's East-West pipeline. That pipeline is a key route for getting oil around the Strait of Hormuz, and the disruption pushed the daily Brent price as high as $131 on September 15. The agency now expects Brent to average $105 in the fourth quarter, $14 more than it forecast in September.
From there, the EIA expects crude to fall as exports from the Middle East recover and depleted inventories are rebuilt, reaching $87 by the second quarter of 2027 and $74 by the fourth. The agency cautioned that continued volatility in oil flows will likely produce bigger short-term swings than its forecast shows. It finalized its numbers on October 1, so they do not account for any extra supply from the G7 announcement on October 2.
EIA forecast for regular gasoline, October 2026 outlook
| Period | Regular gasoline ($/gal) | Diesel ($/gal) | Brent crude ($/bbl) |
|---|---|---|---|
| Q3 2026 (actual) | $4.11 | $5.57 | $95.95 |
| Q4 2026 | $4.15 | $5.81 | $104.69 |
| Q1 2027 | $3.71 | $4.92 | $94.90 |
| Q2 2027 | $3.76 | $4.57 | $87.00 |
| Q3 2027 | $3.56 | $4.30 | $80.03 |
| Q4 2027 | $3.24 | $4.18 | $73.94 |
Source: EIA Short-Term Energy Outlook, October 6, 2026, Table 2. Retail prices include taxes. Q3 2026 figures are the EIA's historical estimates.
Diesel and pump margins
Diesel is the bigger worry. Retail diesel averaged $6.29 a gallon in September, and the EIA expects it to stay above $6 in October before easing to about $4.50 on average next year. East Coast distillate inventories were 32% below their five-year seasonal average in September, and the agency expects them to stay 20% to 30% below average through the winter.
There is also a reason lower crude will not show up at the pump right away. The EIA said retail and distribution margins have been squeezed this year because wholesale prices surged, and it expects those margins to widen back above the five-year average in 2027 once wholesale prices fall. It also expects the gasoline crack spread, the gap between crude and wholesale gasoline, to stay above seasonal norms into early 2027 because U.S. inventories are low.
What it means for your fuel budget
Using the EIA's numbers, a driver covering 15,000 miles a year in a vehicle that averages 25 mpg would spend about $2,490 on fuel a year at the fourth-quarter forecast of $4.15, and about $2,136 at next year's $3.56 average. Those are Drive Edition's calculations. In a 43-mpg vehicle such as the front-drive 2026 Toyota RAV4 hybrid, as rated by the EPA, the same mileage would cost about $1,448 at $4.15 a gallon.
The EIA's next outlook is due November 10.
