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Friday, November 23, 2012 - Page updated at 05:30 p.m.
Drivers pay more for gas, but still give thanks
By SANDY SHORE
The Associated Press
Many drivers are giving more at the pump than a year ago but still have reason to be thankful this holiday weekend. Prices in many parts of the country have fallen recently, and AAA says gas prices could end the year lower than where they started.
The national average Wednesday was $3.43, down 44 cents from mid-September although still 8 cents higher than a year earlier.
Gas started the year at $3.28 a gallon. AAA says it should be between $3.10 and $3.30 when 2012 ends.
Still, because the price was so high for so much of the year, Americans are likely to spend a record amount for gas in 2012.
Tom Kloza, of the Oil Price Information Service, estimates people will spend about $483 billion on fuel this year, eclipsing last year’s record of $471 billion. And that’s even as Americans use less gas by taking shorter trips or driving more fuel-efficient cars.
The Energy Department estimates that gas prices will average $3.64 a gallon this year after averaging a record $3.53 a gallon in 2011.
A number of things affect the price. It starts with oil, which can be affected by everything from the strength, or weakness, of the global economy to tensions in the Middle East.
That oil is turned into gasoline and other products at refineries. The U.S. has about half the number of refineries it did 30 years ago.
When one goes down due to a fire or unplanned maintenance, it can lead to a shortage of gasoline, which sends prices higher.
All these factors have come into play in a big way this year. That’s why prices haven’t just been high — they’ve been on a roller coaster. There have been four separate swings of at least 40 cents — two higher and two lower.
The wild swings have been even more notable in individual states.
In Washington, gas prices have dropped about 70 cents after jumping above $4 a gallon in May. Most drivers are now getting a discount of about 20 cents compared with last year.
The reason: West Coast refineries, which had been closed for fires or other maintenance, are operating again. That includes BP’s Cherry Point refinery in Whatcom County.
Washington also is benefiting from cheaper crude delivered by rail from the Bakken shale region in North Dakota, where oil production is booming. Bakken crude is on average about $4 a gallon cheaper than oil at the Clearbrook, Minn., pricing hub, says Kloza.
On Wednesday, the average price for AAA’s Seattle-Bellevue-Everett region was $3.52 a gallon, down 20 cents from a year ago.
In California, the price is about the same as a year ago, but that belies the wild ride motorists have taken. Gas there soared to an all-time high of $4.67 in October because gas supplies ran short. The state’s energy infrastructure took it on the chin. A fire closed part of Chevron’s Richmond, Calif., refinery in early August.
Plus, a Chevron pipeline that moves crude oil to refineries in Northern California also was shut down, and operations at an Exxon Mobil refinery in Southern California were disrupted for days after it lost power.
Since few refineries outside the state make California’s special blend of summer gas, there were few outside sources.Prices since have fallen nearly 90 cents as supply shortages eased and refiners shifted to winter blends, which are cheaper to produce.
Wednesday’s average price in California is $3.77 a gallon, up 1 cent from a year ago.