Prepare to spend more on gas this year

Prepare to spend more on gas this year

Coronavirus pandemic restrictions that likely kept millions of drivers home last year also kept spending on gasoline relatively low.

According to analysts at GasBuddy, drivers spent nearly $100 billion less on fuel in 2020 than they did the year prior, even though pump prices were low.

GasBuddy doesn’t see that trend continuing. The fuel data trackers predict that drivers will spend around $325.6 billion on fuel in 2021, a 16.3% increase from the roughly $280 billion spent in 2020.

Part of that extra spending is likely to come from more driving, both as cities and states ease restrictions and as commuters continue to shy away from public transportation.

Additionally, prices at the pump are likely to be up by around 27 cents a gallon on average in 2021, though GasBuddy anticipates fuel prices to remain under $3 in most major metropolitan areas outside a handful of larger cities. Last year, the average price at the pump was $2.17 for a gallon of regular unleaded.

The coronavirus pandemic rocked the industry. Crude oil prices briefly dropped to negative due to a glut of fuel in spring 2020, though the price per barrel has risen to something closer to normal levels nine months later.

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Still, the oil industry is hardly in a bull market. Demand for fuel drops considerably when coronavirus restrictions are put into place since more workers are told to log in from home rather than commute into the office.

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