Katerina Swanson
The United States is a large exporter of oil and one of the largest consumers of gasoline in the world. In 2022, Americans consumed about 135.73 billion gallons of gasoline, with Texas and California accounting for the largest share of total consumption. Americans spend about 3.2% of their annual budget on gas, averaging $204 per month, or $1,837 per year. The average price of gas in 2021 was $3.27 per gallon, compared to $2.18 the previous year. Regional differences in gas prices can also affect spending, with Wyoming's average gas price of $2.415 being lower than Connecticut's average of $2.539 in November 2021.
| Characteristics | Values |
|---|---|
| Average monthly gas budget | $204 |
| Average annual gas budget | $2,449, $3,800, $4,000, $5,000 |
| Average price of gas | $3.27 |
| Average gallons of gas used per year | 562 |
| Percentage of annual budget spent on gas | 3.2% |
| Average monthly gas spending | $153.08 |
| Average cost of gasoline in Wyoming | $2.415 |
| Average cost of gasoline in Connecticut | $2.539 |
| Cost-saving strategies | Using gas credit cards, carpooling, using vehicles with automatic stop-and-start systems or hybrids that use electric-only modes |
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What You'll Learn
Average US household fuel spend
Fuel is one of the biggest expenses for many Americans. In 2021, the average annual household expenditure on gasoline was $2,148, slightly more than electricity, natural gas, and fuel oil combined. This figure increased in 2022, with the average household spending $2,780 on gasoline. According to 2023 data, the average US household spent $2,449 on gasoline, or about $204 per month. This amounts to approximately 3.2% of the average household's gross income.
The cost of gasoline varies across the United States. For example, in November 2021, the average cost of gasoline was $2.415 per gallon in Wyoming and $2.539 in Connecticut. Despite the higher fuel price in Connecticut, a Wyoming resident may spend more than double on gas due to driving longer distances. Similarly, the average share of income spent on vehicle fuel varies by state, ranging from 2.24% in New York to 3.95% in South Dakota.
The price of gasoline is influenced by several factors, including the cost of crude oil, refinery margins, distribution costs, retail margins, and fuel taxes. Crude oil typically accounts for more than half of the final retail price of gasoline. For instance, in 2022, crude oil made up 57% of the retail gasoline price.
The amount of money a household spends on fuel also depends on factors such as the number of vehicles owned, fuel efficiency, driving behaviour, and local fuel prices. According to the U.S. Census Bureau, 91.6% of households own at least one car, and more than half own two or more. Additionally, aggressive driving behaviours such as sudden acceleration or hard braking can increase fuel consumption.
While the US Energy Information Administration (EIA) expects gas prices to stabilize in 2024 and beyond, total fuel costs for each household will still depend on local prices and mileage. Some sources estimate that individuals who commute frequently may spend up to $4,000 on gasoline annually, depending on their commute and location.
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Regional price variations
Fuel costs make up a significant portion of American household expenses, with some spending as much as $4,000 on gas in a year. The average American household spends around $2,449 on gasoline annually, which equates to approximately 3.2% of their annual budget or $204 per month. However, this varies greatly depending on income, with low-income households allocating a larger proportion of their budget to fuel.
Several factors contribute to these regional price variations. One key factor is the number of gasoline stations in an area. Locations with fewer gas stations often have higher prices. Additionally, even stations located close together can have different pricing strategies due to variations in traffic patterns, rent, and sources of supply. Pipeline disruptions, refinery maintenance or shutdowns, and natural disasters like hurricanes can also impact gasoline prices in specific regions.
Another factor influencing regional price variations is the type of gasoline required in certain areas. Some regions are mandated to use reformulated gasoline, which includes additives to reduce carbon monoxide, smog, and toxic air pollutants. About one-third of the gasoline sold in the United States falls into this category, driving up costs in those regions. Environmental programs may also impose restrictions on fuel transportation and storage, affecting prices.
Understanding these regional price variations can help drivers make informed decisions about their fuel usage and implement cost-saving strategies. For example, driving sensibly, using cruise control, and reducing idling time can help improve fuel efficiency and reduce overall fuel costs. Additionally, using gas credit cards, carpooling, and considering electric or hybrid vehicles can also help mitigate the financial burden of fuel expenses.
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Cost-saving strategies
The average American driver spends about $3,000 per year on gas, with some spending as much as $4,000 per year, depending on their commute and location. With fuel prices constantly fluctuating, adopting cost-saving strategies can help drivers save money and contribute to a greener planet. Here are some effective strategies to save on fuel costs:
Drive Efficiently
Aggressive driving can reduce your fuel economy by up to 30% on highways and 40% in cities. Driving sensibly by accelerating and braking gently can improve fuel efficiency significantly. Additionally, driving at a steady speed on highways instead of local routes or city streets can maximize fuel efficiency. Using cruise control can also help maintain a steady speed and improve fuel economy.
Regular Vehicle Maintenance
Keeping your vehicle well-maintained is crucial for optimal fuel economy. Fixing serious maintenance issues, such as a faulty oxygen sensor, can improve mileage by up to 40%. Ensuring your vehicle is properly tuned can also enhance fuel efficiency. Using the manufacturer's recommended grade of motor oil can improve gas mileage by 1-2%.
Leverage Technology
Utilize smartphone apps such as GasBuddy, AAA, and Gas Guru to find the cheapest gas prices and plan the most efficient routes. These apps allow you to filter results by fuel grade, distance, and price, helping you make informed decisions and save money.
Adopt Fuel-Saving Habits
Simple changes in driving habits can lead to substantial savings. Avoid unnecessary idling, as it can waste up to 2.5 gallons of fuel per month. Consider carpooling, consolidating trips, or using public transportation to reduce the time spent in your car and lower fuel consumption. Additionally, walking or biking for shorter distances can eliminate fuel costs for those trips.
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Consider switching to a smaller car with a less powerful engine, as they tend to have lower fuel costs. Electric vehicles or hybrids that use electric-only modes can also be more cost-effective. Using bio-diesel or ethanol-blended gasoline can be less polluting and potentially more economical than traditional gasoline.
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Fuel efficiency
One of the earliest initiatives towards fuel efficiency was the introduction of the Corporate Average Fuel Economy (CAFE) standards in 1975. These regulations set fuel economy standards for manufacturers, aiming to improve fuel efficiency over time. While there have been fluctuations in the stringency of these standards, the overall goal has been to reduce fuel consumption and emissions.
In 2019, the United States saw the sale of slightly more than 16 million light-duty vehicles (LDVs), which had an average fuel consumption of 8.6 litres of gasoline equivalent (Lge/ 100 km). This average fuel consumption was 20% higher than the global average. However, it's important to note that fuel consumption in LDVs decreased by an average of 2.1% per year from 2005 to 2017. Improvements have slowed, and in some cases, like large SUVs and city cars, fuel consumption has increased since 2017.
To address these challenges, the Biden administration has taken several regulatory actions. In 2024, the National Highway Traffic Safety Administration (NHTSA) tightened vehicle fuel economy rules, aiming for about 50.4 miles per gallon by 2031. This target is less stringent than initially proposed but still represents a significant improvement from the current standard of 39.1 miles per gallon. Additionally, the NHTSA is working to boost heavy-duty pickup truck and van fuel efficiency by 10% annually from 2030 to 2032 and 8% per year from 2033 to 2035.
On an individual level, Americans spend around 3.2% of their annual budget on gas, averaging $204 per month. This expense can vary depending on factors such as income, commute distance, and vehicle fuel efficiency. Strategies to reduce fuel costs include using gas credit cards, carpooling, consolidating trips, and considering electric vehicles. Additionally, driving habits play a role in fuel efficiency, with aggressive driving styles leading to higher fuel consumption. Implementing driving habits like accelerating and slowing down gently, using cruise control, and reducing idling time can significantly improve fuel efficiency and save costs.
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Income disparity
While the exact amount that the USA spends on fuel is unclear, some sources indicate that the average American household spends $2,449 on gasoline annually, which equates to about $204 per month. This amount varies depending on location and driving habits, with drivers in Wyoming spending more than double on gasoline than those in Connecticut due to differences in fuel efficiency and regional gas prices.
The oil and gas industry in the USA is extremely lucrative, generating $244.4 billion in revenue in 2023, a decrease from its peak of $330.8 billion the previous year. Despite this, oil and gas companies benefit from subsidies and tax breaks, with defenders of these subsidies claiming that these companies already pay more than their fair share of taxes. However, this is misleading as the actual domestic income tax rates paid by these corporations are far lower than often stated, with the majority of income taxes paid going overseas.
To reduce fuel costs, consumers are advised to use gas credit cards, carpool, or consider electric vehicles. Additionally, driving habits can impact fuel efficiency, with aggressive driving and excessive idling wasting valuable fuel. Implementing cost-saving measures and improving driving habits can help alleviate the burden of high fuel costs, especially for low-income households already facing income disparity in their fuel spending.
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Frequently asked questions
Americans spend 3.2% of their annual budget on gas, which is about $2,449 per household per year, or $1,837 per individual per year.
Americans spend on average $204 on gas per month.
Assuming a constant rate of spending, Americans spend about $6.70 on gas per day.
Americans spend between $1,837 and $4,000 on gas per person per year, depending on their commute and where they live.
