Gas prices are on the rise across the country, with the national average climbing 11 cents in just one week, reaching $3.28 per gallon, according to AAA. This surge in prices comes as bad news for consumers already feeling the pinch of the cost of living. While some of the increase is typical for this time of year as winter ends and demand for gas rises, there are also abnormal factors at play. Refinery outages, including a significant shutdown of the largest refinery in the Midwest, have limited the supply of gas.
With millions of Americans preparing to hit the road for the Presidents’ Day weekend, they will be greeted by the highest gas prices in almost three months. The jump in prices, although expected to some extent, adds to the frustration consumers are already experiencing. Higher gas prices can complicate the Federal Reserve’s efforts to combat inflation, and they undermine the White House’s election year message that touted the benefits of Bidenomics, including affordable gas prices.
The reasons behind the increase involve both seasonal and unforeseen factors. Prices typically rise as winter comes to an end due to increased demand and the switch to more expensive summer fuel by gas stations. This transition has already occurred in Southern California, adding approximately 30 cents per gallon to gas prices. Additionally, scheduled maintenance shutdowns of refineries during late winter and early spring limit the amount of oil that can be converted into gasoline, further restricting supply.
However, this winter has seen unscheduled refinery outages that have exacerbated the situation. The prolonged shutdown of BP’s Whiting refinery in northwest Indiana, the largest in the Midwest, has contributed significantly to the spike in gas prices. States in the Midwest, such as Ohio, Indiana, and Illinois, have experienced the most significant price increases in the past month. Refinery outages in the Rocky Mountain region have also played a role in driving gas prices higher.
Despite the recent surge, it is important to note that gas prices are still lower than they were a year ago. At this time last year, the national average for regular gas stood at $3.42 per gallon. Looking ahead, experts predict that gas prices will continue to rise, albeit at a slower pace, as long as no major disruptions occur. Andy Lipow, president of consulting firm Lipow Oil Associates, expects the national average to peak between $3.50 and $3.75 per gallon this summer.
However, unexpected events such as escalating tensions in the Middle East or refinery outages could result in more significant price spikes. Patrick De Haan, head of petroleum analysis at GasBuddy, anticipates the national average hitting $3.50 per gallon by March or April but does not foresee prices reaching $4 per gallon this year unless unforeseen circumstances arise.
As gas prices continue to climb, it remains a sensitive subject for Americans. The White House and the President ultimately have limited control over market forces that drive gas prices. While prices are expected to rise, they are still lower than in previous years, and as long as supply remains stable, the impact on consumers may be tempered. However, any major disruptions or geopolitical events have the potential to disrupt the delicate balance and lead to further increases at the pump.
In conclusion, rising gas prices are a reality across the country. While some increase is normal for this time of year, refinery outages are also playing a significant role in limiting supply. With the highest gas prices in nearly three months, consumers are feeling the effects of the cost of living. However, experts believe that prices will continue to rise but likely at a slower pace, as long as there are no major disruptions. The White House is navigating the challenge of rising gas prices, which can complicate their messaging and the broader economic landscape.
