Low Gas Prices Are So 2016
CARS.COM — Remember about a year ago when gas was selling for less than $2 in many parts of the country? Hang on to that memory, because gas might not be that low again any time soon.
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Price-tracker GasBuddy.com forecasts that the average price for regular gas this year will be $2.49 a gallon — a 36-cent increase over 2016 — and that U.S. motorists will shell out $355 billion to fuel their vehicles — $52 billion more than last year. Last year was the fourth in a row for lower average prices, and the $2.13 average was the lowest since 2004.
“2017 will not be a repeat of 2016, with prices notably higher, and while we’re unlikely to see record-setting highs, we will see more cities with gas prices rising to their highest in three years,” GasBuddy senior analyst Patrick DeHaan said in the annual forecast. “It may be years before some of the low prices we saw in 2016 come back.”
GasBuddy and the AAA Daily Fuel Gauge Report listed the national average for regular gas on Thursday at $2.36 a gallon, a 37-cent increase over the same date last year. Premium gas is 34 cents higher at $2.84, and diesel fuel is 28 cents higher at $2.52. Average prices for all three rose again the past week, the sixth week in a row they have gone up
The increases were triggered when the Organization of Petroleum Exporting Countries voted Nov. 30 to cut production starting in January. Since then, U.S. oil prices have climbed from about $43 a barrel to nearly $54. A year ago, when the national average for regular gas was $1.99, U.S. oil was trading for around $20 less per barrel.
DeHaan noted that a year ago nearly 100,000 U.S. gas stations were selling regular for less than $2, but today it is less than 3,000. At $2.36 a gallon, the national average for regular is already just 3 cents shy of the peak for 2016, set on June 11, according to GasBuddy.
GasBuddy predicts that pump prices will decline slightly in February, when refiners sell off remaining stocks of winter-blend gas, and then rise during the spring to a peak national average of $2.67 for regular by May. Prices typically rise in the spring when refiners switch to summer gas blends that are more expensive to produce and reduce gasoline production while conducting seasonal maintenance.
The forecast also warns that motorists in some major cities could pay $3.50 a gallon or more for regular gas during peak demand periods in the spring and summer. GasBuddy said regular could rise to $3.50 in Chicago and Seattle; $3.55 in New York City; $3.60 in Philadelphia and Washington, D.C.; $3.75 in Los Angeles; and $3.85 in San Francisco.
During 2016, the statewide average for regular never reached $3 in any state, but Hawaii has already passed that mark this year. AAA said regular averaged $3.02 in Hawaii on Thursday.
Regular gas averaged more than $2.50 a gallon in seven other states and the District of Columbia on Thursday. Among them were Pennsylvania, where a 7.9-cent state tax increase on Jan. 1 helped boost prices 14 cents the past week to $2.64, and Michigan, where state taxes increased 7.3 cents. Michigan’s average price rose 16 cents to $2.54. South Carolina had the lowest statewide average at $2.13, according to AAA, followed by Alabama, Arizona and Tennessee at $2.14.
