Feds Revise Forecast as Gas Prices Expected To Increase | Edmunds

Feds Revise Forecast as Gas Prices Expected To Increase


WASHINGTON — Car shoppers factoring pump prices into the equation should note that the U.S. Energy Information Administration revised its short-term outlook, saying that regular gasoline retail prices are forecast to average $2.21 a gallon during the April-through-September summer driving season.

That's 17 cents a gallon higher than last month's forecast, but 42 cents a gallon lower than last summer.

The U.S. EIA said U.S. regular gasoline retail prices are forecast to average $2.08 a gallon in 2016 and $2.24 a gallon in 2017, 14 cents a gallon higher and 24 cents a gallon higher respectively than forecast in April.

The AAA Daily Fuel Gauge Report notes that prices have been moving higher recently.

However, "drivers continue to benefit from year-over-year discounts, saving 45 cents per gallon on the year," it said.

AAA pegged the average price for a gallon of unleaded gasoline at $2.20 on Thursday, compared to $2.65 a year ago.

Relatively low gas prices are expected to continue to lure car shoppers away from hybrid and electric vehicles.

Some of the most popular vehicles in April were trucks and SUVs, according to the monthly car sales report. Among the standouts: the 2016 Chevrolet Colorado pickup truck, 2016 Ford Explorer SUV and 2016 Jeep Renegade SUV.

An April analysis by Edmunds.com found only 27.5 percent of all hybrid and electric vehicle trade-ins in 2016 have been applied to the purchase of another hybrid or EV. The rate is a precipitous drop from the 38.5 percent of hybrid and EV trade-ins in 2015.

Shoppers are trading in their hybrids and EVs for fuel-efficient compact crossovers, signaling that fuel economy is still somewhat of a priority.

The Edmunds study found that 16.4 percent of hybrid and EV trade-ins this year went toward compact crossovers. Only about 1.4 percent went toward a gas-guzzling purchase of a large SUV or crossover SUV.

Edmunds says: Car shoppers concerned about pump prices may want to rethink their plans, based on new information from the federal government.

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