Drivers Could Pay 40-50 Cents More per Gallon for Gas this Spring according to AAA Colorado
Denver, January 30 – Drivers should expect more expensive gas prices in the coming weeks as refineries cut production to conduct seasonal maintenance, according to AAA Colorado. Many drivers could pay about 40-50 cents more per gallon for gas before the national average peaks at $3.70-$3.85 per gallon before summer. The current national average for a gallon of regular unleaded gas is $3.28. The current Colorado average is $3.20.
AAA’s nationwide price forecast for 2014 is:
- Springtime peak of $3.70-$3.85 per gallon
- Early summer low of $3.30-$3.40 per gallon
- Late-summer high of $3.55-$3.70 per gallon
- End-of-year low of $3.10-$3.20 per gallon
Seasonal gasoline price changes
Prices generally rise sharply in February because many refineries cut production to conduct seasonal maintenance, which can limit gasoline supplies and cause market uncertainty. This maintenance generally takes place between strong demand periods for heating oil in the winter and gasoline in the summer, and before the regulated switchover to summer-blend gasoline. This switchover process itself can further limit supplies and increase pump prices. Last year the national average increased 49 cents per gallon over 41 days before peaking at $3.79 per gallon on February 27. In Colorado, the average increased 74 cents per gallon during that same period reaching $3.59. Colorado hit its peak average price for 2013 the week of May 19 at $3.85.
After a springtime peak, gas prices should fall as the refinery maintenance period ends and production returns to normal rates, though there could be temporary price increases as stations switch to summer-blend gasoline or because of unexpected refinery problems. By late June the national average could drop to $3.30-$3.40 per gallon, which would likely be the lowest price until late autumn. Last year the national average reached a summer low of $3.47 per gallon on July 7. Colorado reached a summer low of $3.53 a gallon in late August.
Strong travel and demand generally leads to higher gas prices during the second half of the summer. The national average could reach $3.55-$3.70 per gallon by September, or cost even more if there is a strong Atlantic hurricane season. Fortunately by October, gas prices should start a long decline towards $3.10-$3.20 per gallon by the end of the year due to weakening demand and the switchover to less expensive winter-blend gasoline. The national average last year reached a low of $3.18 per gallon on November 12. Colorado’s low was $3.05 the week of December 15.
Regional differences in gasoline prices
Prices along the Gulf Coast and in the central part of the country likely will be the least expensive due to lower taxes and access to abundant supplies of cheaper North American crude oil. Gas prices in some parts of the region may drop below $3.00 per gallon before the year is over.
The West Coast and the Northeast will have the most expensive gas prices due to higher taxes and because local refineries must rely on more costly, imported crude oil and gasoline due to infrastructure and pipeline limitations. Many drivers in these two regions may pay more than $4.00 per gallon during peak periods.
“Unexpected developments and events overseas could change AAA’s price outlook considerably, but there is little doubt that gas will cost more than most of us would like in 2014,” said Bob Darbelnet, President and CEO of AAA. “The best advice for dealing with another tough year is to follow simple gas savings tips such as shopping around, maintaining your car and driving the speed limit.”
AAA Colorado has more than 575,000 members and is an advocate for safety and security for all travelers. As North America’s largest motoring and leisure travel organization, AAA provides more than 54 million members with travel, insurance, financial and automotive related services, as well as member exclusive savings.