2012 Gas Prices Most Expensive on Record

AAA predicts more moderate prices in 2013, after 2012 saw the most expensive year for gas prices ever.

PORTLAND, Ore.,) – “The Oregon average for regular unleaded in 2012 is $3.81, 14 cents higher than the previous high of $3.67 in 2011. The national average price of regular unleaded in 2012 is $3.60, nine cents more expensive than the previous high of $3.51 in 2011.” AAA Oregon/Idaho Public Affairs Director Marie Dodds says, “AAA expects gas prices in 2013 to average less than they did in 2012 as a result of increased domestic oil production and lower demand, barring unanticipated events. The national average price of gas may peak around $3.60 to $3.80 per gallon, while the Oregon average may peak in the $3.80 to $4.00 range.”

Currently, the national average is $3.30 a gallon, up a penny from a week ago. The Oregon average is $3.38, also up a penny.

In 2012, the national average peaked at $3.94 a gallon on April 6. Oregon’s average peaked on June 1 at $4.27 a gallon, just shy of the record high of $4.29 set on July 3, 2008.

Gasoline prices in 2012 reached record highs partly as a result of unanticipated production disruptions from refinery fires, pipeline closures and major hurricanes. Oil prices also were higher as a result of tensions in the Middle East including new sanctions on Iran. These types of market-moving events are impossible to predict and any forecast on gasoline prices can change as a result of similar factors.

AAA projects gas prices will rise steadily through April or early May, but at a slower pace than last year. As is typical for this time of year, prices will rise as a result of seasonal demand increases and in anticipation of the switchover to more expensive and cleaner-burning summer-blend gasoline. Following a late-spring peak, prices nationally should drop during the first half of the summer to as low as $3.20 to $3.40 per gallon before rising again in advance of the Gulf Coast hurricane season and the switchover to winter-blend gasoline. Prices should end the year by falling to low or near-low averages for 2013.

“Absent significant storms, major wars, or production and distribution outages, the single largest factor that will influence gasoline prices in 2013 will be the strength of the U.S. economy,” adds Dodds. “Stronger than expected growth in the economy would result in higher oil and gasoline prices in anticipation of higher consumption, while a weaker than expected economy would drive prices downwards. Inaction by Congress to reach a debt deal in two months also would result in increased concern about the U.S. economy and could lead to lower gasoline prices.”

Most Expensive Gas Prices 2011 vs. 2012 chart

Drivers are now paying less for gasoline than last year – a trend that AAA believes is likely to continue. After setting new all-time daily records for each calendar day since August 20, the national average price fell below the year-ago price on Saturday, Jan.5. The Oregon average dropped below the year-ago price on Nov. 3, 2012.

Drivers in 39 states today are paying lower average gasoline prices than a year ago. States paying more than last year are located primarily in the Northeast, which is still dealing with the supply aftereffects of Hurricane Sandy. The average price of gasoline today is below $3 per gallon in six states: Utah, Wyoming, Colorado, Minnesota, Idaho and Oklahoma. The only state paying more than $4 per gallon is Hawaii.

In the first 90 days of 2012, geopolitical tensions with Iran pressured the national price at the pump almost 65 cents higher. Without a similar market moving story to begin 2013, it is likely that the year-over-year discount will widen in the coming months.

While retail gasoline prices are currently rising at a slower rate than to start 2012, higher crude oil prices are putting upward pressure on pump prices. Crude oil prices have slowly increased in recent weeks. At Monday’s close of formal trading on the NYMEX, the price of West Texas Intermediate (WTI) crude oil settled at $93.19 per barrel, up 10 cents on the day. This is the highest settlement price since Sept. 18, but is still well below the 2012 high of $109.77 per barrel on Feb. 24. Today WTI continues to trade around $93 per barrel. Crude prices are up about 9 percent in the last month.

Hawaii has the most expensive gas prices in the country for the 12th consecutive week, and as noted above, Hawaii is the only state with an average price above $4 a gallon. For the ninth week in a row, both Oregon and Washington remain out of the ten most expensive states, but California remains in the top five. Hawaii is most expensive at $4.01, followed by New York at $3.75, Connecticut at $3.69, California at $3.61 (up four cents), and Alaska at $3.58. Washington is 17th most expensive at $3.40 (up half a cent). Oregon is 18th at $3.38 (up a penny). Idaho is 47th at $2.98 (down 7 cents). Utah has the cheapest gas in the nation at $2.90 a gallon (down a dime).

Diesel prices are holding fairly steady. The national average dips half a cent to $3.91 while Oregon’s average remains at $3.93. Diesel is at or above $4 a gallon in 13 states (including the District of Columbia). Hawaii is most expensive at $4.88, followed by New York at $4.32, Connecticut at $4.30, Vermont at $4.17 and Maine at $4.16. California is seventh at $4.11 (up a penny). Washington is 15th at $3.99 (down a penny). Oregon is 24th most expensive. Idaho is 50th at $3.66 (down a nickel). A year ago, the national average for diesel was $3.86 and Oregon’s was $3.95.