Across the nation, gasoline prices are on a rapid incline, catching the attention of millions of Americans planning to travel during the Presidents’ Day weekend. According to AAA, the national average has surged by 11 cents in just a week, reaching $3.28 per gallon, marking the highest prices seen in nearly three months.
While some of this increase is a seasonal norm, attributed to heightened demand as winter comes to an end and the transition to more expensive summer fuel blends, abnormal factors such as refinery outages are exacerbating the situation.
This spike in gas prices poses significant challenges for consumers already grappling with the rising cost of living, and it could present headaches for policymakers in Washington, particularly as they navigate the Federal Reserve’s efforts to combat inflation.
Patrick De Haan, head of petroleum analysis at GasBuddy, emphasized the sensitivity of gas prices for Americans, noting that market forces largely dictate price fluctuations rather than actions by the White House.
The rise in gas prices is driven by various factors, including the seasonal increase in oil prices and the switch to pricier summer fuel blends. Refinery outages, notably the prolonged shutdown of BP’s Whiting refinery in the Midwest, have further constrained supply, leading to significant price spikes in states like Ohio, Indiana, and Illinois.
While experts anticipate continued increases in gas prices, they expect the pace of rise to slow down. Andy Lipow, president of Lipow Oil Associates, forecasts a peak national average of between $3.50 and $3.75 per gallon this summer, barring major disruptions in oil supply due to geopolitical tensions in the Middle East.
GasBuddy’s De Haan predicts a similar trajectory, with the national average potentially reaching $3.50 per gallon by March or April. However, he remains optimistic that prices won’t surpass $4 per gallon unless unforeseen events, such as refinery outages or geopolitical unrest, disrupt the market.
