Gas Prices Nearly 30 Cents Less Than Last Spring

Published in CSP Daily News

National average price fell during March for first time in 10 years: AAA

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WASHINGTON -- The national average price of gasoline decreased during March for the first time in 10 years, and gasoline prices now average nearly 30 cents per gallon less than a year ago, said AAA in its Monthly Gas Price Report. The national average should remain less expensive than last year's prices this spring, it said.

The national average for April 1 was $3.63 per gallon, which compares to $3.92 per gallon a year ago. The national average decreased 15 cents per gallon (3.9 percent) last month, which was the first month-over-month decline for March since 2003, when the average decreased by one cent per gallon.

"It is very unusual for gas prices to decline in early spring like we have seen this year," said AAA spokesperson Avery Ash. "An increase in refinery production and lower oil prices in early March have combined to provide rare falling prices for motorists in comparison to recent years."

The national average reached $3.79 per gallon on Feb. 27, which currently is the highest average price for 2013. Since that time, the national average has dropped 29 out of 33 days.

The national average increased 34 cents (10%) per gallon from the beginning of the year ($3.29) through the end of first-quarter 2013. Last year, gasoline prices increased nearly twice as much during the first quarter with a rise 65 cents (20%) per gallon.

This week marks the one-year anniversary of the 2012 peak in gasoline prices, when the national average reached $3.94 per gallon on April 5 and 6. Gasoline prices peaked in 2011 at $3.98 per gallon on May 5.

Gasoline prices declined in March as many refineries resumed normal operations following the completion of seasonal maintenance. The price of West Texas Intermediate (WTI) crude oil also remained relatively low for much of the month. Gasoline prices spiked in late January through February primarily because of supply concerns with refineries in February processing the lowest amount of crude oil in nearly two years due to extensive maintenance and facility upgrades.

In April, gasoline prices should remain less expensive than in recent years because oil is cheaper and refinery production is rising. The price of WTI crude oil is about $6 per barrel less than a year ago, while refinery utilization has increased by about 5% since early March, according to the federal Energy Information Administration (EIA).

"AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year," said Ash. "While it is possible that gas prices may surge briefly again this spring, the national average should remain less than last year's high of $3.94 per gallon. Yet even with the recent declines, we cannot lose track of the fact that gasoline remains very expensive for many American motorists."

Much of the country must transition to more expensive summer-blend gasoline and there is still refinery maintenance left to complete, which could result in a brief surge in gasoline prices.

AAA expects the average price of gasoline in 2013 will be less than last year as a result of increased domestic production and continued low demand.

Motorists in only two states are paying an average of more than $4 per gallon for gasoline today--Hawaii ($4.38) and California ($4.04). This contrasts with a month ago when 60 million Americans (20%) lived in a state where gasoline prices averaged more than $4 per gallon.

The five states with the highest gasoline price averages on April 1 included Hawaii ($4.383), California ($4.044), Alaska ($3.998), New York ($3.893) and Connecticut ($3.873). The five states with the cheapest gasoline price averages today include: Wyoming ($3.328), Montana ($3.358), South Carolina ($3.411), Tennessee ($3.425) and Arkansas ($3.436).