AAA: Gas prices expected to rise
Many drivers may pay rising gas prices this spring as refineries conduct seasonal maintenance, but the peak may be less expensive than last year. The national average price of gas could reach an estimated $3.55-$3.75 per gallon, according to AAA.
“Winter weather, weak demand and sufficient supplies have kept gas prices relatively low recently, but this trend may not last much longer,” said Bob Darbelnet, president and CEO of AAA. “Driving to the gas station could be a lot more frustrating as prices increase this spring.”
Prices generally rise in the spring because many refineries cut production to conduct seasonal maintenance, which can limit gasoline supplies and cause market uncertainty. This maintenance generally takes place between strong demand periods for heating oil in the winter and gasoline in the summer and before the regulated switchover to summer-blend gasoline. This switchover process itself can further limit supplies and increase pump prices. Last year, the national average increased 49 cents per gallon over 41 days before peaking at $3.79 per gallon on Feb. 27. Gas prices similarly increased 56 cents per gallon in spring 2012 and 86 cents per gallon in 2011.
“There is a good chance that average gasoline prices this year will cost less than in 2013, but it is not going to be cheap,” continued Darbelnet. “The expected springtime rise in gas prices likely will be temporary, but that will not make it any easier to pay $60 or more to fill up your car.”
After a springtime peak, gas prices generally fall as the refinery maintenance period ends and production returns to normal rates, though there could be temporary price increases because of unexpected problems. By late June the national average could drop to $3.30 to $3.40 per gallon, which likely would be the lowest price until late autumn. Last year, the national average reached a summer low of $3.47 per gallon on July 7. Gas prices declined 61 cents from springtime peaks in summer 2012 and 44 cents in 2011.
Strong demand and the risk of hurricanes can lead to higher gas prices during the second half of the summer.
“Few other products can rise in price so suddenly,” continued Darbelnet. “Just imagine if a cup of coffee or a hamburger changed its price daily like gasoline. The average American driver is forced to demonstrate a good deal of tolerance whenever they buy gas.”
By October, gas prices should start a long decline towards the end of the year due to weakening demand and the switchover to less expensive winter-blend gasoline. The national average last year reached a low of $3.18 per gallon on Nov. 12 and similarly averaged $3.22 per gallon in December 2012 and $3.21 per gallon in 2011.
Prices along the Gulf Coast and in the central part of the country likely will be the least expensive due to lower taxes and access to abundant supplies of cheaper North American crude oil. Gas prices in some parts of the region may drop below $3.00 per gallon before the year is over.
The West Coast and the Northeast likely will have the most expensive gas prices due to higher taxes and because local refineries must rely on more costly, imported crude oil and gasoline due to infrastructure and pipeline limitations.
“Unexpected developments and events overseas could change AAA’s price outlook considerably, but there is little doubt that gas will cost more than most of us would like in 2014,” said Darbelnet. “The best advice for dealing with another tough year is to follow simple gas savings tips such as shopping around, maintaining your car and driving the speed limit.”
Gas prices averaged $3.49 per gallon in 2013 and could average at least five cents per gallon less in 2014. Many refineries have increased capacity to take advantage of the recent boom in North American crude oil production, which can limit peak prices and volatility. Gas prices in 2012 were the most expensive on record at $3.60 per gallon, followed by 2011 with an annual average of $3.51 per gallon.
AAA updates fuel price averages daily at www.FuelGaugeReport.AAA.com. AAA clubs can be visited on the Internet at www.AAA.