American motorists have seen the national average for a gallon of regular gasoline rise above $3.50 a gallon on just three occasions, but it has never happened this early in the year. Analysts say it’s likely a sign that pain at the pump will rise to some of the highest levels ever seen later this year.
In 2008, average gasoline prices had hit inflation-adjusted records nationally and in California by the summer, but they didn’t climb above $3.50 a gallon across the U.S. that year until April 21, according to the AAA Fuel Gauge Report. It happened again last year, but not until March 6.
But $3.50 a gallon gasoline is already here in 2012, weeks before refineries typically shut down for springtime maintenance, and weeks before the states switch from their less expensive winter blends of gasoline to more complicated and pricier summer blends.
“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.”
Today, for example, the national average stands at $3.511, up from $3.480 a week ago, according to the AAA report, which gets its figures from prices compiled by the Oil Price Information Service. The current average is also 38.3 cents a gallon higher than the old record for Feb. 13, which was set last year.
California motorists aren’t likely to summon up much sympathy for other drivers. The state’s drivers are already paying an average of $3.839 for a gallon of regular. In the past, the state’s average, which climbed 6.8 cents since last week, has never topped the $3.80 mark before March. And February is usually a month when prices are falling.
There are plenty of reasons for the high prices, and lots of reasons to fear a big price spike in the spring, said Tom Kloza, chief oil analyst for OPIS.
“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, later adding, “We’ve lost a number of refineries in the last six months [to permanent closure]. Some of those refineries represented the key to a smooth spring transition from winter-to-spring gasoline.”
Some cities, like Los Angeles and New York, are already closing in on $4 a gallon, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.
Oil prices also remained at high levels on Monday, rising $2.23 to $100.90 a barrel on the New York Mercantile Exchange. That’s an 18% rise from a year ago. In London, oil rose 48 cents to $117.79 a barrel on the ICE Futures Europe Exchange.