Why gas prices haven’t dropped yet

(NEXSTAR) — 2022 was a rough year for drivers at the pump, especially after gas prices hit a record $5 per gallon in June. With the national average gas price rising once again, many drivers may be wondering when they can expect some relief at the pump.

The national average gas price recently rose for the fifth straight week, bringing it to $3.49 per gallon, according to AAA. That is 9.7 cents higher than a week ago, and Patrick De Haan, head of petroleum analysis at GasBuddy, suspects that price is unlikely to fall due to some major hurdles.

Supply and demand issues are always the biggest factors when it comes to the price of gas, and De Haan said many abnormalities are still fueling the market.

“U.S. refining capacity is still not what it was prior to the pandemic,” De Haan said. “If there are any issues, Russia’s war in Ukraine and the global economy will have a great impact on the price of oil, especially China as it reopens, demand is likely to go up.”

He said refinery utilization still hasn’t fully recovered from December’s cold weather, which delayed refinery maintenance season even further.

“Because of the surge in prices last spring, many refineries that had planned maintenance deferred maintenance until 2023,” De Haan said. “With the can kicked to this year, we may have similar challenges producing enough refined products to meet demand, especially with the European Union cutting off refined products from Russia starting Feb. 5.”

Where cold weather had more of an effect, De Haan said drivers may notice more of an impact at the pump.

“The Arctic weather impacted refineries in the Rocky Mountains,” De Haan said. “In fact, it shut those refineries down for a longer period of time in Colorado, and Colorado was seeing gas prices shoot up 90 cents a gallon because of that refinery primarily serving Colorado. Now gasoline has to be brought in from neighboring refineries.”

Do drivers need to prepare for a repeat of last year, when the average price of a gallon easily topped $4? De Haan said it could happen even sooner than anticipated.

“We had previously expected the possibility that the national average could hit $4 in May. Now that could be moved up to April or potentially even March, not only because of China’s reopening, but because the unexpected setback of that arctic blast having a very significant impact on the delicate balance of supply and demand,” De Haan said.

Gas prices also typically change with the season, since refiners do maintenance and switch to a more expensive summer blend of gasoline. That change usually lasts until the fall, and then gas prices start to drop.

In other words, drivers likely won’t see prices drop until the summer ends, and that’s only if refinery maintenance isn’t delayed further.

So what can drivers do in the meantime? De Haan suggests driving more efficiently.

“It’s the fact that we drive relatively inefficiently that is boosting consumption,” De Haan said. “Things like idling a car in the winter, your car gets zero miles per gallon and results in more consumption when you pre-warm your car. Many Americans leave their cars running at idle when the car is getting zero miles per gallon.

“I know it sounds simple, but we could probably reduce our consumption by 5% to 10%,” he said. “If every American could do very small things to improve their fuel efficiency, that could probably cause enough of a difference to have some measurable impact on gasoline prices.”