Spring Turnaround Begins to Send Gas Prices Higher
WASHINGTON, D.C. — Gas prices made the largest one-week increase of 2016 vs. the prior week, as the national average rose six cents per gallon.
The current average price for regular gasoline is $1.81 per gallon, as of March 7, and the price is likely to keep rising due to spring turnaround activity and supply reductions in select regional markets, according to the latest AAA Fuel Gauge Report.
Drivers are now paying six cents more per gallon compared to one month ago, but significant yearly discounts remain, with pump prices down an average of 65 cents on the year.
Refineries typically perform scheduled maintenance during the first two quarters of the year to prepare for the busy summer driving season. The 2016 spring turnaround has seen lower-than-expected prices, prompting some refineries to adjust their maintenance schedules and/or cut production in response to abundant supplies, AAA said. Refineries have also reportedly begun reducing production to prepare for the switch to summer-blend gasoline.
Gas prices normally change at this time of year. The shift in production scheduled, combined with other seasonal factors, may cause regional prices to change at a faster rate than normal as supply and demand seek balance.
However, the high current supply level and lower price of crude oil will likely place a ceiling on how high gas prices can go in the next few months, so drivers should continue to benefit from relative savings.
Average gas prices are above the $2-per-gallon benchmark in five West Coast states. Drivers in Hawaii are paying the most per gallon at $2.54, followed by California ($2.45), Alaska ($2.16), Washington ($2.10) and Nevada ($2.04). Twenty states are paying $1.75 or less per gallon. Arizona and South Carolina are the least expensive states, both averaging $1.55 per gallon.
Week over week, gas prices are up in 48 states, with 28 states paying a nickel or more per gallon compared to one week ago. Average prices rose by 10 cents or more in eight states over the same time period, with the largest increases in Michigan (14 cents), Colorado (12 cents), West Virginia (11 cents) and Kansas (11 cents). Drivers in three markets are paying less week over week: Alaska (minus 5 cents), Hawaii (minus 3 cents) and Washington, D.C. (fractions of a penny).
Month over month, average prices are up in 26 states, with the largest price jumps occurring in Michigan (34 cents), Minnesota (34 cents), Ohio (33 cents) and Indiana (28 cents). Over the same period, prices are down in 24 states and Washington, D.C., with the largest savings occurring in Arizona (minus 22 cents), Alaska (minus 20 cents) and Nevada (minus 17 cents).
Year over year, drivers nationwide are experiencing savings of more than a quarter per gallon, and prices are down by more than 50 cents per gallon in 44 states and Washington, D.C. The largest yearly savings are in California (minus 98 cents), Arizona (minus 91 cents), Oregon (minus 90 cents) and Nevada (minus 83 cents).
California's major price drop is partially due to the major outage that took place in a Torrance, Calif., ExxonMobil refinery one year ago, as supply shortages caused regional prices to become noticeably higher then.