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Six Week Streak of Lowest Gas Prices Ends, California Gas Prices to Jump as Tax Hits


The party at the pumps is over as the national average broke its six-week streak of falling, rising 0.6 cents per gallon versus last Monday to $2.455/gallon, according to GasBuddy.

The unseasonable rise is mainly due to soaring gasoline prices in the Great Lakes and surrounding areas as inventories in that region hit 2-year lows as refinery maintenance was pushed back and consolidated, leading to less production and lower supply. Oil prices saw gains as well last week as tensions in Iraq continued as well as continued concern that OPEC and non-OPEC countries would continue to reign in over-supply. Oil exports from the U.S. also hit record levels, putting pressure on domestic inventories. Such factors boosted oil prices last week to their highest levels since March, rising over $54 per barrel.

“Oil prices have rebounded in the last week, led higher by geopolitical tensions and declining inventories, leading gasoline prices in some parts of the country to make an unseasonable move higher,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “As refineries continue autumn maintenance, we may continue to see gasoline inventories under pressure, with a mixed bag of increases and decreases in the weeks ahead until the conclusion of such maintenance. Meanwhile, exports of crude oil and refined products continue to hit record levels, also weighing on markets. Without the ability to export crude oil, inventories in the U.S. would have continued to increase, keeping pressure on oil prices, but without such protection, oil is flowing out of the U.S. at a record pace.”

EIA data released last Wednesday showed a large drop in gasoline inventories of 5.5 million barrels, leaving them 4% lower than a year ago. All regions saw inventories decline except the Rockies, which posted a small 0.2-million-barrel increase. Refiners used 87.8% of capacity, a rise of 3.3%, but much of the increase was due to a large 6.5% jump in utilization in refineries in PADD 3, or refineries mainly near the Gulf.

The national average gas price could see an increase again this week as California’s gas tax will see a 12-cent boost at midnight Wednesday while its diesel tax rises an even sharper 22 cents. The increase will push California’s state gasoline taxes to nearly 55 cents per gallon from the current 41.47 cents, putting it in second place behind Pennsylvania for the nation’s highest state gasoline tax.

Across the country, the largest changes in average gas prices by state: Michigan (-10 cents), Indiana (+8 cents), Illinois (+7 cents), Missouri (+7 cents), West Virginia (+5 cents), Delaware (+4 cents), Oklahoma (+4 cents), Minnesota (+4 cents), Ohio (+4 cents) and Pennsylvania (+4 cents).

States with the lowest average gas prices: Mississippi ($2.18), Alabama ($2.19), South Carolina ($2.21), Arkansas ($2.22), Tennessee ($2.23), Louisiana ($2.23), Texas ($2.24), Missouri ($2.26), Virginia ($2.28) and Oklahoma ($2.28).

States with the highest average gas prices: Hawaii ($3.12), California ($3.07), Alaska ($3.07), Washington ($2.87), Nevada ($2.81), Oregon ($2.71), Connecticut ($2.71), Pennsylvania ($2.69), New York ($2.65) and Idaho ($2.62).

All motorists in California will likely want to fill up Tuesday night or earlier to avoid paying higher taxes that follow, as the gas tax jump will cause a nearly 12-cent rise in average gas prices statewide while those filling with diesel will see a 22-cent rise. In addition, motorists in Michigan will likely be seeing higher prices, following neighboring states due to the issues mentioned in the region. As oil prices continue holding near highs, motorists are likely to see a bit more pain at the pump in the week ahead, but it is not likely to last forever. Once refinery maintenance season is complete in the next few weeks, there may be some relief, as long as oil prices do not climb substantially by then.

Head of Petroleum Analysis (USA)

Patrick has developed into the leading source for reliable and accurate information on gas price hikes. Patrick has been interviewed as a gasoline price expert hundreds of times since 2004. Based in Chicago, Patrick brings to GasBuddy all his assets to help consumers by giving reliable and accurate price forecasts, including the San Jose Mercury News dubbing Patrick "one of the nation's most accurate forecasters" in 2012.