Money & Company
Tracking the market and economic trends that shape your finances.
September 12, 2011 | 1:34 pm
Gas prices are rising U.S. motorists are on pace to spend $491 billion for gasoline this year, the most ever.
Fuel prices have been rising again because of expensive crude oil and increased exports of gasoline and diesel to other countries. Although gasoline prices may decline for a few weeks after the switch to winter blends, which are less costly to produce than summer blends, our pump-price woes won’t be going away, fuel experts said.
“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 in New Jersey. “But then the drumbeats will start about fears of a second Arab Spring. 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.”
At one point this year, retail gasoline prices were rising faster than they were even in 2008, when average prices hit record highs of $4.588 a gallon in California and $4.114 nationally.
The run-up in 2008 was followed by the biggest-ever fuel-price collapse. By the last week of December, 2008, motorists had blissfully returned to the much more affordable prices of early 2005, with a gallon of regular in California selling for an average of just $1.810. Nationwide, the average price was $1.613 a gallon.
As a result, the average price nationwide for all of 2008 ended up only about $3.25 a gallon, according to Kloza. But this year, no collapse in the market is anticipated. The average price for the year is running at about $3.66 a gallon, putting the country on track to pay a record $491 million for gasoline for all of 2011, Kloza projects.
The current average price for a gallon of regular gasoline in California is $3.946, according to the AAA Fuel Gauge Report. That’s the highest ever for mid-September, after the end of the summer driving season. Nationally, the average is $3.649 a gallon, also a record for this time of year.
Carol Hill, a 25-year-old Los Angeles resident who waits tables in a restaurant on the Third Street Promenade in Santa Monica, said she was disgusted that she had to pay $3.95 a gallon to fill up her 10-year-old Honda Accord at a BP-Arco station on Lincoln Boulevard near Ocean Park Boulevard.
“The price of gasoline always goes up every year and never falls by as much. So, every year the price is higher. There’s always some excuse someone has. All I know is that I’ll be very happy the day someone hands me the keys to an electric car,” Hill said.
Another reason 2011 is turning out so costly at the pump: U.S. gasoline supplies aren’t growing even though U.S. demand is weak.
The country’s consumption of gasoline is running 157,000 barrels a day below 2010 levels, according to the federal Energy Department. But gasoline inventories in the U.S. currently total 208.8 million barrels, 16.3 million barrels below the same period last year.
The amount of gasoline on hand in the U.S. isn’t rising because an increasing amount of excess fuel here is going overseas.
In fact, in recent months the U.S. has become a net exporter of refined fuels, according to Energy Department statistics. That’s a sea change from as recently as May, when U.S. imports of refined fuels still exceeded exports by 800,000 barrels a day. The latest data show daily exports topping imports by 467,000 barrels, with much of the outgoing fuel heading to Latin America.
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