US Gasoline Prices: Linear Regression Model and ARIMA Model Forecast

The price of gasoline has always been a concern in consumer’s daily lives. As the price increases, consumers spend more on driving. According to the 2022 BP Statistical Review of World Energy, the United States contributed more to the growth of the oil and gasoline consumption in 2021. The study focuses on analyzing past US monthly gasoline price changes and forecasting the prices for the next year. The combination of the linear regression model and Auto Regressive Integrated Moving Average (ARIMA) model is performed to predict the trend and display the forecasted price ranges. The study reveals that there will be an increasing trend for US monthly gasoline prices, starting from $0.964 in August 2023 to $1.108 in July 2024. The lower prices and higher prices from the interval show the same trend of moving upwards. For future research, crude oil demand and supply, and prices are considered as important factors in predicting the gasoline prices because gasoline is a refined product from crude oil.