AAA Monthly Gas Price Report: February 2013 Trends and March Outlook
(WASHINGTON, February 28, 2013)
Highest Increase in Gas Prices to Begin Year on Record
- The national average price of gasoline has increased 49 cents per gallon since the beginning of the year, which is the highest price increase through the end of February on record. Gas prices began 2013 at $3.29 per gallon and have climbed a total of 46 days to a national average of $3.78 per gallon. The previous record through the end of February was a rise of 46 cents per gallon in 2012.
- The dramatic increase has resulted in the highest average prices ever for this time of year. The average price of gas in February was $3.65 per gallon, which was ten cents higher than the previous record for the month set in 2012. Today’s national average of $3.782 per gallon is five cents higher than the average a year ago.
- “Gas prices increased at a dramatically faster pace than expected in February,” said Avery Ash, AAA spokesman. “Motorists unfortunately are paying more for gasoline than ever at this time of year, and it is primarily because of a decline in refinery production and higher futures prices.”
- Many refineries decreased fuel production in January and February to conduct seasonal maintenance and facility upgrades. Along with unplanned refinery issues, this has resulted in the lowest rate of crude oil processing since April 2011. Decreased production squeezes gasoline supplies, which leads to higher pump prices for motorists.
- The anticipated transition to summer-blend gasoline also has contributed to higher prices. The switchover takes place every year and is required to help meet local air quality standards. Summer-blend gasoline costs more to produce and can lead to logistical and distribution challenges.
- The sharp rise in gas prices has come despite a recent drop in the price of crude oil. West Texas Intermediate (WTI) oil futures are about $14 per barrel less than a year ago, which reduces the cost of refining gasoline.
Gasoline Likely to Peak at Lower Average Price than Recent Years
- AAA expects gas prices to peak at a lower national average than last year’s high of $3.94 per gallon. While seasonal gas prices have recently peaked in April or May, it is possible that prices will peak even earlier this year.
- “There is a lot of uncertainty on where gas prices will go over the next few weeks, but hopefully the worst of the price spikes are behind us for now,” continued Ash. “There is still refinery maintenance to be completed and most of the country must transition to summer-blend gasoline, so motorists are likely to face continued high prices in the weeks ahead.”
- Despite the spike in gasoline prices, WTI crude oil has dropped almost $5 per barrel in recent weeks as a result of record-high supplies and concerns about the global economy.
- The national average price of gas has increased in March for nine years in a row, indicating that seasonal supply and demand factors for this time of year can have a significant effect on gas prices.
Gas Prices Vary by More than $1 per Gallon Across the Country
- Gas prices vary by more than a $1 per gallon between the most expensive and cheapest states. The lowest gas prices are in the Rocky Mountain region, which is supplied by refineries with access to relatively cheap crude oil. The most expensive prices in the continental U.S. are in Calif. and N.Y., which have the highest gasoline taxes in the nation.
- Approximately 60 million Americans (nearly 20 percent) today live in a state where gas prices average more than $4 a gallon. Only about eight million Americans (three percent) live in a state where gas is less than $3.50 per gallon on average.
- The five states with the highest averages today include: Hawaii ($4.37), Calif. ($4.24), Alaska ($4.02), N.Y. ($4.01) and Conn. ($3.99). The five states with the lowest averages today include: Wyo. ($3.29), Mont. ($3.29), Utah ($3.43), Idaho ($3.45) and N.M. ($3.49).