Americans could receive an unexpected Christmas gift this year as gas prices plummet to levels not seen since the pandemic lockdowns of 2020.
Holiday Relief at the Pump Emerges
Patrick De Haan, GasBuddy’s Head of Petroleum Analysis, projects the national average will hit $2.79 per gallon by December 25th. This dramatic drop from early December’s $3.10 average stems from West Texas Intermediate crude oil falling to $68 per barrel. The forecast represents welcome news for over 100 million Americans planning holiday travel.
The timing couldn’t be better for families stretching budgets during the expensive holiday season. Unlike previous years when gas prices spiked during peak travel periods, this Christmas delivers the opposite scenario. Economic slowdowns in China and steady U.S. oil production have created a perfect storm for lower prices.
Great news for drivers this holiday season! 🇺🇸⛽
U.S. gas prices have fallen below $3 a gallon nationally — hitting the lowest level in over four years (since 2021), according to AAA and GasBuddy.
As of mid-December 2025, the average is around $2.91 and is still trending down.… pic.twitter.com/Wyq2WGV2Fm
— 𝐃𝐔𝐓𝐂𝐇 (@pr0ud_americans) December 15, 2025
Historical Context Reveals Significance
The last time Americans enjoyed sub-$2.80 gas on Christmas was in 2020, when pandemic lockdowns artificially depressed demand, bringing prices to $2.25 per gallon.
Since then, prices have fluctuated wildly, peaking above $5 per gallon in mid-2022 due to post-COVID recovery, the Russia-Ukraine conflict, and refinery disruptions.
GasBuddy’s track record lends credibility to this forecast, with 80% accuracy in weekly predictions, based on data from over 100,000 gas stations nationwide. The Energy Information Administration and AAA corroborate these trends in their recent reports, with EIA projecting an average of $2.90 for the fourth quarter.
Economic Impact Extends Beyond Individual Savings
The price drop injects an estimated $5-10 billion into consumer spending power during the critical holiday retail period. Rural and low-income drivers benefit most significantly, as transportation costs consume larger portions of their budgets. Trucking companies also see reduced logistics expenses, potentially lowering costs for retailers like Walmart.
This development provides political relief as well, reducing inflation pressures that have dominated economic discussions throughout 2025. Lower energy costs historically correlate with increased consumer confidence and discretionary spending, particularly benefiting the retail sector during its most crucial quarter.
Gasoline prices hit a new four-year low ahead of the Christmas travel week. ⛽🎄https://t.co/uuAbdGnSsT pic.twitter.com/Cem0l6Ql5W
— Yahoo Finance (@YahooFinance) December 16, 2025
Market Forces Align for Sustained Relief
Current market conditions suggest this isn’t merely a temporary dip. U.S. refineries operate at 85-90% utilization rates without major disruptions, while global oil demand remains moderate. The absence of significant geopolitical shocks in major oil-producing regions has stabilized supply chains that were volatile in previous years.
However, uncertainty remains regarding weather disruptions to refineries or potential OPEC production adjustments, which could alter forecasts by 10-20 cents. Some analysts caution that Middle East tensions could reverse these favorable trends, though no immediate threats have materialized.
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Gas Prices Forecast to Drop to $2.79 per Gallon on Christmas, Lowest Since 2020