Gasoline prices continue to rise, mostly in lockstep with oil, which has surged to more than $100 per barrel. The price for a gallon of regular moved above $3 in all 50 states several days ago. It has recently passed the same threshold in all major cities in the United States. With the end of winter a month away, these prices are likely to continue to march higher.
Gasoline prices are traditionally lowest in energy-rich states and regions with large refinery capacity. That has kept gas below $3.15 a gallon in Texas, Mississippi, Louisiana, South Dakota, Wyoming and Missouri, according to GasBuddy. At the other end of the spectrum, mostly large states with few refineries compared to demand, have prices above $3.50. These include New York, California, Connecticut and Pennsylvania. The price in Illinois will soon move higher than $3.50. These states have close to 30% of the nation’s population.
Cities in South Carolina often have some of the lowest gas prices in that nation, among them Spartanburg, Greenville, Columbia and Myrtle Beach. The same holds true in Alabama cities Montgomery, Huntsville and Birmingham, as well as in Louisiana — New Orleans and Baton Rouge — and in Texas cities Austin, Houston and San Antonio.
GasBuddy forecasts that prices will climb for at least the next 45 days. Among the reasons are the approach of summer, capacity problems at European refiners that ship gas to the East Coast, as well as exports from Gulf refineries to South America. Refinery maintenance can also fluctuate substantially. GasBuddy analysts report:
An extensive refinery “turnaround” schedule has just commenced at the U.S. Gulf Coast, with very light work on the docket in the Midwest. The northeast, already finds two huge Delaware River refineries down for maintenance, and the largest offshore contributor to U.S. reformulated gasoline is the Irving refinery in St. John, New Brunswick. That plant will be down for extensive maintenance in late February and most of March.
There is no telling how much higher gasoline prices will affect the economy and consumer spending. However, based on history, the effect is never good.