Elevated Gas Prices Expected to Relax After Labor Day


CARS.COM — As millions of Americans prepare to travel by car over the Labor Day weekend, the cost of filling their tanks will be the lowest it’s been for this holiday since 2004, when the average price of regular gas was $1.86. The AAA Daily Fuel Gauge Report on Thursday said that the national average of $2.22 a gallon for regular gas was 24 cents lower than a year ago. The cost savings are even greater compared to previous years.
Related: Motorist Death Toll Rises as Labor Day Approaches
GasBuddy.com said the average price for regular gas on Labor Day was $3.43 a gallon in 2014, $3.59 in 2013 and $3.83 in 2012. Pumping 15 gallons of gas costs $24 less today on average than it did four years ago.
Pump prices increased during most of August, with the average for regular rising 9 cents a gallon over the past four weeks. Premium gas rose 6 cents to $2.71 and diesel fuel 5 cents to $2.37. That trend may end soon, GasBuddy analyst Patrick DeHaan stated in a blog post.
“With the conclusion of Labor Day weekend comes the conclusion of the summer driving season in the world’s largest gasoline consuming country, setting the stage for gasoline demand and prices to fall,” DeHaan wrote. “In addition, EPA’s summer gasoline requirements end Sept. 15 in much of the nation, opening the door for cheaper winter gasoline to return to pumps.”
He called it “a double whammy of downward pressure just in time for autumn – a yearly trend that’s unfazed by upcoming elections.” The so-called winter gas that refineries produce starting in September is cheaper to make, and pump prices also typically decline after Labor Day as Americans do less driving. High demand for gas, plus rising oil prices and a series of refinery outages conspired to make gas more expensive during August. Refineries in Whiting, Ind., Baton Rouge, La., Baytown, Tex., and Carson, Calif., recently suffered damage or required unscheduled maintenance, reducing their output.
The result is that different states across the country took turns experiencing price jumps. The average for regular in Indiana, for example, rose 8 cents the past week and 19 cents over the past two weeks, in part because of the issues at a BP refinery in Whiting. The week before, prices jumped 10 cents in Missouri and 11 cents in South Carolina.
Prices also rose in most of the Southeast the past two weeks as flooding hampered production at Gulf Coast refineries. As a result, on Sept. 1 the average price for regular gas, according to AAA, was under $2 in only two states: Alabama at $1.99 and South Carolina at $1.97. On Aug. 1, 15 states averaged less than $2. Regular averages more than $2.50 in four states: Alaska, California, Hawaii and Washington, with Hawaii the most expensive at $2.74.
Media reports said most problems at refineries have been resolved or soon will be, so gasoline production should return to normal levels. In addition, U.S. oil prices, which topped $48 per barrel at the end of last week, had fallen back to $44 in early trading Thursday.
Though most signs point to declining pump prices for the remainder of the year, 2016 has a tough act to follow. Gas prices fell steadily after Labor Day in 2015, and the national average dropped below $2 by Christmas.

Contributor Rick Popely has covered the auto industry for decades and hosts a weekly online radio show on TalkZone.com.
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