American households could pocket an extra $550 on average next year as gasoline prices continue to shrink. In an era of cheap crude oil and fuel-efficient cars, annual spending on motor fuel in 2015 is on track to fall to its lowest level in 11 years, the U.S. Energy Information Administration said Tuesday.
Household gasoline costs are forecast to average about $1,962 next year -- the first time gas spending has dipped below $2,000 since 2009, according to the federal statistics agency. The forecast assumes that Brent crude oil, an international benchmark, will average $68 per barrel in 2015, while spot prices for U.S. light crude will average $63 a barrel.
Crude prices this year are down 40 percent since June as global supply outpaces demand. U.S. gasoline prices have fallen in step, dropping for 11 weeks in a row to $2.55 per gallon on Monday, the lowest price since October 2009, and the price at the pump will drop even further next year. Crude oil prices account for about two-thirds of the price American drivers pay for each gallon of gasoline, according to the agency.
Analysts say the gas savings will deliver a jolt to discount retail chains, restaurants and auto dealerships as Americans spend those extra dollars. “Lower gas prices are a boon for the economy,” Michael Green, an AAA spokesman, said in an October interview, around the time when gas prices first slipped below $3 a gallon.
Lower gas costs could also make for additional holiday cheer, Mary Epner, CEO of Mary Epner Retail Analysis in New York City, said. “I think it just feels a little more festive. [Families] may be able to guy an extra gift, or a few more holiday decorations,” she said in an earlier interview.