As gas prices are a significant concern for small business owners, recent forecasts from the U.S. Energy Information Administration (EIA) promise some relief. According to their latest Short-Term Energy Outlook, retail gasoline prices are expected to decrease by 6% in 2026. While this may sound like great news, regional differences and underlying factors present both opportunities and challenges that small businesses must navigate.

The forecast indicates a general decline in gasoline prices across the United States, with an average drop in 2026 before a slight increase of 1% in 2027. Despite this uptick, prices in 2027 will still remain below the levels seen in 2025, except for the West Coast, where higher gasoline margins due to a reduction in refinery capacity may keep prices at 2025 levels.

“Gasoline prices will vary significantly across regions,” notes Kevin Hack, a principal contributor to the report. “While we expect the Gulf Coast to maintain the lowest gasoline prices, the West Coast will likely see the highest.” This differential pricing creates an important consideration for small business owners, especially those whose operations depend on fuel, such as delivery services or transportation businesses.

Small businesses located in the Gulf Coast region can anticipate lower operational costs owing to reduced fuel prices, which can enhance their margins and competitive edge. Conversely, those on the West Coast may face tighter budgets due to higher gasoline costs. As such, careful budgeting and strategic planning will be crucial for businesses operating in higher-cost areas.

The EIA’s report attributes the projected decrease in gasoline prices primarily to a decline in crude oil prices, which has historically accounted for about 50% of the retail price. Now, that percentage is expected to fall below 45% in the coming years, creating a more favorable environment for small business owners. The anticipated increase in global crude oil supply alongside moderated demand appears set to provide price stability.

Nevertheless, there are challenges embedded within this forecast. The EIA warns of a potential decrease in U.S. refinery capacity, particularly impacting regions like the West Coast. This drop could partly offset the benefits of lower crude prices, leading to higher gasoline margins and pricing. Businesses relying heavily on local suppliers might need to reassess their relationships and logistics to mitigate any disruptions.

Understanding crack spreads—the difference between wholesale gasoline and crude oil prices—can also be valuable for small business owners. An increase in crack spreads signals higher refinery profits, which may ultimately affect consumer prices. While these spreads are expected to rise due to tighter inventories, they are projected to remain below levels seen in 2022 and 2023.

For small business owners, these nuances offer a mixed bag of implications. Lower gas prices could ease some financial burdens, allowing for reinvestment in business or improved pricing strategies for consumers. Conversely, a tighter refinery market could mean less predictability in operational costs, making it essential for business owners to stay informed and agile.

As we look ahead, the details are becoming clearer. Small businesses must remain vigilant in tracking fuel price trends and understand their own exposure to these changes. By being proactive and adjusting their strategies according to regional price fluctuations and supply chain dynamics, they can better position themselves for growth in this emerging economic landscape.

For more detailed insights into the forecast and its implications, you can view the full report from the EIA at this link.

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This article, “Gasoline Prices Set to Drop Nationwide in 2026, Stabilizing in 2027” was first published on Small Business Trends