Gas Spending Nears Record Level
LOS ANGELES -- Anyone with a car has suffered from sticker shock when pulling up to the gas pump this year, so it should be no surprise that U.S. drivers could spend a record $491 billion for gasoline this year.
Gas prices may dip a bit over the next few weeks as the country switches its gas supply to winter blends -- which are less costly to produce -- but high gas prices are here to stay, according to a report by the L.A. Times.
"The 30 days between now and mid-October will be the most hospitable days in the country for dropping prices," said Tom Kloza, chief oil analyst for the Oil Price Information Service (OPIS), who came up with the $491 billion estimate. "But then, the drumbeats will start about fears of a second Arab Spring [of political unrest]. Demand outside of Europe and the U.S. continues to rise. By spring, Americans will be wrestling with $4 gasoline in a lot of markets."
The current average price for a gallon of regular gasoline stands at $3.642, with premium at $3.909, according to AAA's Daily Fuel Gauge Report. Today's price is nearly a dollar more than a year ago when the average was $2.709 for regular and $2.980 for premium.
As the newspaper reported, the average price is noticeably below the all-time high set in 2008 when it cost drivers $4.114 a gallon to fill up their tanks. However, overall, drivers have spent more for fuel this year than three years ago because prices have risen faster in 2011 and stayed high longer.
Energy Department statistics show that gasoline demand in the United States is running 157,000 barrels a day below 2010 levels. At the same time, gasoline stocks in the country are down 16.3 million barrels below last year, at 208.8 million barrels, even though refinery outputs are high.
Rising inventories in periods of weak demand are one of the things that drive retail prices lower, but the refined fuels aren't staying here; they are going overseas, the newspaper noted.
"We do know that there have been more sales overseas this year compared to previous years," said Gregg Laskoski, a senior petroleum analyst for GasBuddy.com. "That has been most evident in the Midwest. When we look at the BP Whiting refinery in Indiana, which is one of the largest in the country, you see the output is strong, yet we are still seeing a lot of high prices in the markets this refinery is serving.
"It's troubling for consumers to try to reconcile the high price they see at the pump when the seemingly local refineries that served them in the past are now outsourcing more of their products overseas," he added.