Gas prices will rise this summer but should remain low
NEW YORK – You didn’t think those super-low gas prices would last forever, did you?
The U.S. government says a rebound in oil prices means drivers will be paying more at the pump this summer than last year. But that will still be a bargain compared to just a few years ago.
The Energy Information Administration on Tuesday forecast that retail gas will cost an average of $2.46 a gallon from April through September, up from $2.23 a gallon over the summer of 2016.
The price of crude oil has risen about 15 percent over the last year, although at $53 a barrel, oil still costs about half as much as it did in the middle of 2014. Prices tumbled after that because of a huge supply glut.
“Motorists have gotten used to gas prices under $3 a gallon and that will continue,” says Patrick DeHaan, senior petroleum analyst for the gas price tracking firm GasBuddy.
Gas prices rise over the summer as more people hit the road to take advantage of the warmer weather and school breaks. And while gas prices can vary a great deal depending on geography and other factors, the agency says it believes the average price of gas will rise to $2.39 a gallon this year, from $2.15 a gallon in 2016.
If that holds, the average U.S. household would spend about $200 more on gasoline than it did in 2016, the EIA said. But that imaginary average household would still save about $300 compared to average yearly spending on gas from 2012 to 2016.
Gas prices are now the highest they’ve been in about a year and a half, according to the American Automobile Association. Prices at the pump are now above $3 a gallon in some places, a barrier that is psychologically significant and keeps some people from driving as much as they would otherwise.
“Demand for gasoline likely will be flat or slightly lower than last year because of the increase in price,” DeHaan said.
Diesel prices are also expected to rise to $2.70 a gallon this year from $2.34 a gallon, but that’s also well below the average price of the fuel over the last five years. The U.S. now produces so much more oil than it did in years past that oil prices, and in turn gas prices, are much lower than they were a couple of years ago.
While DeHaan expects gas consumption to fall slightly, he said drivers will probably set another record for the amount of miles they drive because fuel efficiency has improved.