Gas prices will soon drop to their lowest level of the year.
By today, the national average should fall below the $3.28 a gallon that drivers paid on Jan. 1, according to analysts. The drop is a gift for those hitting the road during what is expected to be the busiest Christmas travel season in six years.
Still, it’s more like a stocking stuffer. That’s because for the second straight year, Americans will spend a record amount on gasoline. The government estimates that gas averaged $3.63 a gallon this year, 10 cents above the record set a year ago.
Drivers can only hope that forecasts for lower prices next year come true.
A combination of high oil prices and supply shortages caused by refinery and pipeline problems kept gas prices elevated for most of the year. The national average hit a high of $3.94 a gallon in early April and was around $3.87 in September after Hurricane Isaac disrupted supplies from the Gulf Coast.
Prices in most areas have fallen since then as supplies got replenished and refiners switched to cheaper winter blends of fuel. However, New York and New Jersey saw temporary spikes in November due to Superstorm Sandy.
At $3.77 a gallon, New York’s average price is the second-highest in the nation, behind Hawaii’s $4, according to auto club AAA.
Californians continue to pay some of the highest gas prices in the U.S. But they’re likely relieved to be spending an average of $3.59 a gallon just two months after a refinery fire and pipeline shutdown sent prices at the corner station soaring close to $5.
The nation’s lowest prices are found mostly in the lower Midwest and parts of the South. Missouri is closest to cracking the $3 level, with its average price of $3.01. Oklahoma, South Carolina and four other states show an average of $3.10 a gallon or less.
AAA says 93.3 million people will travel at least 50 miles between Dec. 22 and Jan. 1, the most since 2006. So, the falling price of gas will provide a little relief to motorists, who’ve been digging deep for gas money all year. The average driver will pay a little less than $2,700 for 744 gallons of gasoline this year, which will be a record, according to data from Oil Prices Information Service.
Americans’ fuel bill ran up even as they used the least amount of gas in more than a decade. The slower U.S. economy and an increase in fuel efficient cars helped cut gasoline consumption, which government data show peaked in 2007. Consumption is expected to be about 8.73 million barrels per day this year, which would be the lowest level since 2001.
Prices should be cheaper next year, forecasters say.
Barring unexpected events like hurricanes or a conflict that disrupts oil supplies from the Middle East, OPIS chief oil analyst Tom Kloza said the nationwide price for gas should stay below $4 per gallon in 2013. The government is predicting $3.43 a gallon for next year, which would be the lowest price since 2010 when gas averaged $2.78 a gallon.