Fast rise in gas prices bodes ill for motorists
U.S. motorists have seen the national average for regular gasoline rise above $3.50 a gallon in just three different years, but it has never happened this early.
The national average hit $3.523 a gallon, the Energy Department said Monday, up 4.1 cents from a week earlier. Analysts said the early price shocker is probably a sign that pain at the pump will rise to some of the highest levels ever this year.
“This definitely sets the stage, potentially, for much higher prices later this year,” said Brian L. Milne, refined-fuels editor for Telvent DTN, a commodity information services firm. “There’s a chance that the U.S. average tops $4 a gallon by June, with some parts of the country approaching $5 a gallon.”
Even in 2008, the year that average gasoline prices hit records above $4 nationally and in California during the summer, the U.S. average didn’t climb above $3.50 until April 21, according to the Energy Department’s weekly survey of service stations. The $3.50 mark also was breached last year, but not until March 6.
This time, the dubious milestone was hit weeks before prices usually rise because of refineries typically shutting down for spring maintenance, and weeks before the prices rise again when states switch from less expensive winter blends of gasoline to more complicated and more expensive summer blends.
California motorists aren’t likely to summon much sympathy for drivers in other states. They are paying an average of $3.835 for a gallon of regular gas, up 7.7 cents from a week earlier. In the past, the state’s average had never topped the $3.80 mark before March. And February is usually a month when prices fall.
There are plenty of reasons for the high prices, and lots of reasons to expect a big price surge in the spring, said Tom Kloza, chief oil analyst for Oil Price Information Service.
“Early February crude oil prices are higher than they’ve ever been on similar calendar dates through the years, and the price of crude sets the standard for gasoline prices,” Kloza said.
In addition, several refineries have been mothballed in recent months, he said, and some of those refineries “represented the key to a smooth spring transition from winter-to-spring gasoline.”
The annual change in gasoline formulas is mandated by pollution-fighting regulations.
Some cities, including Los Angeles and New York, already are closing in on $4 a gallon, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a website that tracks gasoline prices.
The high cost has inspired considerable disgust among drivers like Stanley Moore, who paid $3.85 a gallon at an Arco station in San Pedro.
Moore, a child-welfare social worker, was on his mobile phone at the gas station Monday, patting pockets for a pen and a scrap of paper to write down a name, until he realized he could just write the name in the grime on the hood of his gray 1999 Nissan Sentra; it was that dirty.
“I used to wash it pretty often, take a little pride in how it looked,” said Moore, who thinks he last had it washed shortly after Labor Day. “All that money goes right into the gas tank now. Every year it gets worse.”
In other energy news, oil prices remained at elevated levels, rising $2.24 to close at $100.91 a barrel on the New York Mercantile Exchange. That’s up about 18% from a year earlier. In London trading, oil rose 62 cents to $117.93 a barrel.