NJ Gas Near $5 Again? Experts Forecast Fuel Prices In 2023

NEW JERSEY — Gas prices reached absurd levels in 2022, bringing New Jersey to record-high costs to fill up. While this year shouldn't be as volatile, it won't necessarily be cheap, industry experts say.

New Jersey gas prices averaged $3.30 per gallon as of Monday — significantly down from the state-record average of $5.06 on June 13 — according to AAA. However, there's a chance that the region's gas prices approach the $5 mark this year. GasBuddy's 2023 Fuel Price Outlook projects that the daily-average gas price this year will peak at $4.50-$4.95 in New York City and $4.45-$4.95 in Philadelphia.

GasBuddy's outlook, released Dec. 28, predicts that the national-average cost per gallon will reduce from $3.04 in January to $2.99 in February. Costs will then gradually rise each month, peaking at $3.99 in June before a steady decline to $3.49 in December.

Patrick De Haan, GasBuddy's head of petroleum analysis, excepts a national average of $3.49 for 2023 — down from last year's mark ($3.96) but higher than 2020 ($2.17) and 2021 ($3.02).

The last year brought volatility to the fuel economy. While a combination of global factors always impacts supply and demand, a primary price indicator, several domestic and international issues brought volatility to 2022, including rapid inflation and the economic fallout of Russia invading Ukraine.

While De Haan anticipates a less chaotic market in 2023, the new year will still bring challenges. In response to inflation, central banks raised interest rates to slow down growth.

"Such moves risk tipping economies into slowdowns or even recessions," De Haan said, "and as the U.S. economy has seen fast-paced growth in jobs, it will take a delicate hand to slow growth while not pushing the U.S. into recession, which could leave gas prices lower. However, should the U.S. avoid a significant slowdown, there could be an upside risk to our forecast."

AAA expects gas prices to spike in the short-term, with the late-December winter storm sparking increased costs. The storm cause refineries as far south as Texas and the Gulf Coast to temporarily shut down, while the weather prompted holiday travelers to hit the road early. The greater demand and falling supply pushed fuel prices higher, according to the auto club.

"The cost of gas will likely rise a bit more before this surge stalls due to less expensive oil and a return to seasonal driving patterns," said Andrew Gross, AAA spokesperson. "But 2022 will go down as a record year with a national annual average of $3.96."

New Jersey's Monday average of $3.30 per gallon stood 2 cents higher than the naitonal average, according to AAA. Sussex County averaged the cheapest mark at $3.16 per gallon, while Somerset County had the highest prices at $3.45 per gallon.