Will Summer Drivers See Lower Gas Prices?

At a Glance

• Retail gasoline prices will be around $3.14/gal over the summer, according to the U.S. Energy Information Administration.
• OPEC+ countries are planning to increase production in June and July, boosting supply.

Summer gasoline season is underway, and it is likely that consumers will see some respite at the pump. Memorial Day weekend marks the start to the driving season in the United States with increases in travel, warmer temperatures and holidays. Retail gasoline prices declined in May by 15% compared to the year prior. This year, 45.1 million Americans plan to travel over the long weekend with road trips expected to surpass records according to the American Automobile Association (AAA). 

Most gasoline in the United States is required to be a “summer” grade of gasoline from May 1 through September 15 and must meet different performance and environmental specifications than fuel sold during the winter, fall and spring.

What is RVP and Why Does it Matter for Summer Gasoline?

Reid Vapor Pressure (RVP) measures the rate at which petroleum liquids evaporate. During hot summer months, high volatility fuels evaporate more quickly, increasing emissions of volatile organic compounds (VOCs). The Clean Air Act requires summer gasoline to be less volatile than in the fall. Gasoline with lower RVP is sold at retail stations during the summer season in efforts to reduce evaporative emissions of volatile organic compounds (VOCs) that contribute to ground level ozone formation (smog) and diminish the effects of ozone-related health problems. Gasoline prices tend to be more expensive in the summer due to the cost of the components associated with producing it with these more stringent specifications.

Determining the Cost of Gasoline

There are four main elements that go into pricing a gallon of gasoline at the pump – crude oil is the largest at 54%, taxes are next at 17%, followed by distribution and marketing at 16% and finally refining at 14%. Gasoline prices follow crude oil closely as it is the largest component of gasoline production. Changes in the price of crude oil and factors such as the economy, geopolitics, supply and demand, and inventories directly impact the price of gasoline at the pump.

Lower Prices this Summer?

In its Short Term Energy Outlook, the U.S. Energy Information Administration (EIA) lowered its retail gasoline price forecast for summer to average approximately $3.14 per gallon over Q2 2025 and Q3 2025, a decrease of 9% over the same period last year. The main driver is the decline in crude prices, which was spurred by the announcement of OPEC+ countries increasing output in June and July, expanding the surplus.

The RBOB gasoline futures benchmark which represents the wholesale price of gasoline averaged $2.0850 per gallon in April 2025. The price of the RBOB futures contract reflects the expectation of the future price of RBOB gasoline for delivery in New York Harbor. It is a key indicator of the current market sentiment regarding gasoline demand, supply and other factors. As of mid-May, futures prices are showing RBOB Gasoline at $2.1309 per gallon and $2.0965 per gallon for the months of July and August. The forward curve for the seasonal transition to winter grade gasoline in September shows $1.9173 per gallon.

Gasoline prices are influenced by a myriad of factors. Summer gasoline plays a pivotal role in reducing pollution and improving air quality during the hottest months of the year. This year, it looks like the summer season will provide drivers with savings in their pockets.

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Originally Posted on May 27, 2025 – Will Summer Drivers See Lower Gas Prices?