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End Of Winter Drives Nation's Gas Prices Uphill

Feb 19, 2013
Originally published on February 19, 2013 6:42 pm

If you've been behind the wheel recently, you already know gasoline prices are up.

The national average price for regular gas rose to nearly $3.75 a gallon Tuesday, according to AAA's Daily Fuel Gauge Report.

"Retail prices have gone up for each of the last 33 or so days — dating back to about Jan. 17," says Denton Cinquegrana, executive editor at the Oil Price Information Service.

He estimates prices will rise a bit more in coming weeks, but he doesn't expect them to go above $4 a gallon like they did in the summer of 2008.

Cinquegrana says prices rise near the end of winter every year. As refineries switch to summer blends to reduce smog, they shut down units and work on maintenance. Traders worry there won't be enough supply, so they start bidding up prices.

Cinquegrana says this time around it's happening a few weeks earlier than typical. One reason is refiners are catching up on maintenance and repair work they weren't able to do late last year because of Superstorm Sandy.

At an Exxon station just outside Philadelphia, regular gas is selling for nearly $3.78 per gallon.

"I've been looking around for the past four stations, and this was the cheapest one," Billy Boylan says while filling up his white sedan.

A few pumps over, Nicole Cornwell fondly remembers when the price was $1.50 a gallon. Actually, winter of 2003 was the last time gas hovered around that cost, according to the U.S. Energy Information Administration.

Cornwell says she drives a lot for her work — she cleans houses and offices. "I got a new car and I got some good gas mileage, so that at least helps," she says.

Since prices are going up earlier this year, they may come back down sooner, too.

"Gas prices are probably going to be higher at Easter than they are at Memorial Day and Fourth of July," Cinquegrana says. He cautions that could change if there are unexpected refinery shutdowns or more political problems in the Middle East's oil-producing countries.

The Energy Information Administration projects lower gas prices in the near future, primarily because world oil prices are expected to decline. Crude oil accounts for about two-thirds of the cost of a gallon of gas.

Overall this year, the EIA believes regular gas will average $3.55 per gallon across the country and $3.39 in 2014.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, This is ALL THINGS CONSIDERED. I'm Melissa Block.

If you drive a car, you already know gas prices are up. The national average for regular gas has risen to nearly 3.75 a gallon. It's typical for prices to jump near the end of winter, when refineries turn to different formulas they use during the summer, to reduce smog.

But as NPR's Jeff Brady reports, this year the rise in prices is happening earlier.

JEFF BRADY, BYLINE: At the Oil Price Information Service, executive editor Denton Cinquegrana has been watching those prices closely.

DENTON CINQUEGRANA: Retail prices have gone up for each of the last 33 or so days, dating back to about January 17th.

BRADY: Cinquegrana says he doesn't see prices going above $4 a gallon like they did in the summer of 2008. He says as refineries switch to summer blends, they shut down units and do maintenance. Traders worry there won't be enough supply, so they start bidding up prices; this year that's happening a few weeks earlier than typical.

Cinquegrana says one reason is refiners are catching up on maintenance and repair work they weren't able to do late last year because of Superstorm Sandy.

(SOUNDBITE OF MACHINERY)

BRADY: At an Exxon station just outside Philadelphia, regular gas is selling for just under $3.78 a gallon. Billy Boyland is putting $20 worth into his Honda Accord.

BILLY BOYLAND: I've been looking around for the past four stations and this was the cheapest one.

BRADY: So 3.78, that's a bargain?

BOYLAND: Yeah, well.

(LAUGHTER)

BOYLAND: Comparatively.

BRADY: A few pumps over is Nicole Cornwell.

NICOLE CORNWELL: I remember when gas was a dollar-fifty.

(LAUGHTER)

BRADY: Cornwell cleans houses and offices for a living, so she drives a lot.

CORNWELL: I got a new car and I got some good gas mileage, so that at least helps.

BRADY: Most analysts believe prices will continue to rise a bit more. Cinquegrana says since the rise started early it may end sooner than typical.

CINQUEGRANA: Gas prices are probably going to be higher at Easter than they are at Memorial Day and Fourth of July.

BRADY: And looking out a few years, the U.S. Department of Energy projects lower gas prices primarily because world crude oil prices are expected to decline. The department predicts regular gas will average $3.55 a gallon overall this year. And next year, federal energy forecasters believe the average will fall to $3.39.

Jeff Brady, NPR News, Philadelphia. Transcript provided by NPR, Copyright NPR.