Drivers looking for a break at the pump will likely have to wait, as gasoline prices this summer could be the highest in eight years (adjusted for inflation), according to the Energy Information Administration.
In its latest Short-Term Energy Outlook, EIA estimates regular gasoline will cost $3.84 a gallon, up from $3.06 last summer and the highest since the summer of 2014.
More drivers will also be out on the road this summer, but not as many as during the pre-pandemic summer of 2019, the agency said in its Summer Fuels Outlook, which is released each year in the April STEO.
“We expect that the combination of rising employment and decreasing effects of the COVID-19 pandemic on travel will increase U.S. gasoline consumption during the summer," the report said. “Higher gasoline prices, however, may reduce recreational travel, limiting some potential gasoline consumption."
EIA expects U.S. households will spend on average about $2,945 on gasoline in 2022, which is $455 (or 18%) more than last year.
This month, EIA expects April Henry Hub natural gas spot prices to average $5.95 per million British thermal units. The agency forecasts second-quarter prices to average $5.68/MMBtu, a dramatic increase over last month's forecast of $3.83/MMBtu for the same time period.
Looking ahead, EIA expects Henry Hub prices to average $5.23 for all of 2022 and $4.01 for 2023.
Energy prices are subject to uncertainty because of Russia's invasion of Ukraine, OPEC production decisions and the rate at which U.S. oil and natural gas producers increase drilling, the agency said.
The share of electricity generation from renewables will continue to rise, from 20% in 2021 to 22% in 2022 and 23% in 2023, due to more wind and energy sources coming online. As a result, the share of natural gas used in generation will drop despite lower spot prices, the report said.
“Although new natural gas-fired power generating units are scheduled to come online in 2022, they are likely to be run at lower utilization rates than in recent years," according to the April STEO.
Increasing renewable generation also means that coal will make up a smaller share of electricity—23% in both 2021 and 2022 and 21% by 2023. A major contributor to coal's declining share will be the retirement of coal-fired plants in 2022, EIA said in a January analysis. That report said U.S. operators expect to retire 14.9 gigawatts of all generating capacity this year.