No sign of relief at gas station for American motorists
January 20 (UPI) — Retail gasoline prices continue to rise amid a broader recovery in commodities, and the trend is expected to continue as consumer demand remains robust, the AAA auto club said.
AAA put the national average retail price Friday at $3.39 a gallon of regular unleaded gasoline. This is about 10 cents higher than a week ago, 25 cents higher than at the same time last month, and 7 cents higher than a year ago.
Last year, motorists had to cope with $5 gasoline due to supply disruptions due to Western-backed sanctions on Russian crude supplies. In February, Western economies will no longer receive refined products such as diesel and gasoline from Russia, setting the stage for another round of supply-side problems.
Meanwhile, demand in the US economy remains high. Except for the inclement weather on the west coast, it had been a mild winter so far, and travelers hadn’t been intimidated by it.
“Growing demand for gas has contributed to higher prices for pumps,” the AAA said in a statement. “If demand remains robust, drivers are likely to see pump prices rise over the weekend.”
US federal data shows that demand is actually below last year’s level, even though total gasoline inventories are about 8% below the five-year average for this time of year.
Meanwhile, refineries are gearing up for seasonal overhaul before switching to summer blend gasoline production. Both should push prices up: Refinery maintenance limits production, and summer gasoline blends are more expensive due to the extra processing steps needed to keep it from evaporating during the warmer months.
Texas remains the only state in the country with an average price below the $3 mark but barely reaching $2.99 per gallon. In mid-December, this price was close to the national average.
Pump prices should rise over the next few months but are unlikely to hit last year’s peaks. The federal government estimated the average price last year at $3.97 per gallon and forecast $3.32 for 2023.
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