DALLAS - Household spending for automotive fuels in 2015 will fall to the lowest level in 11 years, according to a Dec. 16 forecast from the U.S. Energy Information Administration.
The average household is expected to spend $550 less on gasoline than in 2014, the EIA said. If spending falls to $1,962 as predicted, it would be the first time since 2009 that outlays for gasoline fell below $2,000, the agency said.
The price for U.S. regular gasoline has fallen 11 weeks in a row to $2.55 per gallon as of Dec. 15, down $1.16 per gallon from its 2014 peak in late April and the lowest price since October 2009, the EIA said.
Prices are forecast to go even lower in 2015, the EIA said.
For the bond industry, the price of gasoline is important because lower prices could lead to increased use of toll roads or more driving, which could lead to increased revenues for highways, some analysts say. Fuel taxes in most states are levied on a per-gallon basis rather than as a percentage of the price. Lower pump prices are seen as an incentive to drive more.
Gasoline prices have fallen 28% as oil has fallen by nearly 50% since June. At the same time, more fuel efficient cars and trucks have reduced consumption.
EIA predicts that the average price of West Texas Intermediate crude will be about $63 per barrel in 2015.
"However, the current values of futures and options contracts show high uncertainty regarding the price outlook," the agency said.
Every 10-cent decline in gas prices could translate into an additional $14 billion of disposable income to U.S. consumers annually, EIA said.
However, the EIA warns that low gas prices do not automatically lead to increases in driving.
The agency estimates increasing driving by just 1% would require a 25% to 50% drop in gas prices. In the 1990s, a 12% price drop could lead to a 1% increase in driving, the agency said.
As for why people are driving less, the EIA cites aging Baby Boomers, teens delaying getting their driver's licenses - possibly due to economic pressures - and urban lifestyles that allow for more use of rapid transit.
