The Era of Cheap Gasoline Is Over
Motor group AAA reports the national average for a gallon of regular unleaded gasoline for Wednesday was $3.50, down more than 30 cents from the same time last year. Refiners are starting to switch to the cheaper winter blend of gasoline, suggesting prices will continue to decline for the rest of the year.
That scenario is supported by the recent increase in Libyan oil production and indications military action in Syria is off the table for the time being. The last time the average price for a gallon of regular unleaded gasoline in the United States was below $3, however, was the day before Christmas Eve 2010. AAA said that, on average, prices may never be that low again.
Midseason refinery issues and security concerns in the Middle East and North America pushed gasoline prices about the $4 per gallon mark in the Midwest market this year. A few months and a Labor Day holiday later, and Midwest states like Ohio, Indiana, and Michigan are paying almost 50 cents less than they were during the summer. The U.S. Energy Department said the national average peaked at $3.68 in July, but by the time its short-term energy report was published last week, even West Coast consumers were experiencing less pain at the pump. The report attributed lower prices to “ample inventories” and the absence of outages like last year’s disaster at Chevron’s Richmond refinery.