Gasoline Prices Poised to Rise Amidst Refineries' Woes

Gasoline prices are anticipated to surge in the upcoming weeks due to the impact of refinery maintenance and outages, especially in California, which is spilling over into the market ahead of the annual switch to costlier summer blends.

Current Market Overview

As of Wednesday, the national average gasoline price stood at $3.16 per gallon, representing an increase of $0.04 from a month ago and a decline of $0.11 from one year prior, according to AAA data.

West Coast Woes

"The national average has moved slightly higher, primarily driven by significant gas price increases on the West Coast," said Patrick De Haan, head of petroleum analysis at GasBuddy. "Refinery maintenance and outages have created a ripple effect in neighboring states, resulting in higher prices in many communities."

Future Forecasts

De Haan anticipates an increase of $0.25 to $0.60 in the national gas average between now and mid-April, with the most expensive fuel remaining along the West Coast. Tom Kloza, OPIS global head of energy analysis, predicts a rise of $0.20 to $0.33 per gallon before reaching a peak between Easter and Cinco de Mayo.

Supply Concerns

Planned seasonal maintenance at refineries has strained supply, while a fire at the Martinez refinery in Northern California on February 1 forced the shutdown of most of its units.

Summer Fuel Switch

These outages precede the annual transition to more expensive summer fuel blends, with western states leading the changeover. California, known for its high gasoline prices due to environmental fees and taxes, has witnessed a $0.41 increase over the past month to $4.85 per gallon, approximately $0.20 higher than a year ago.

Long-Term Outlook

Despite the short-term spike, Kloza projects lower retail gas prices in the latter half of 2025. "US gas price averages will generally remain well below $3 per gallon in the last third of the year unless a hurricane strikes the US Gulf Coast," he said.

The Energy Information Administration (EIA) anticipates an $0.11 per gallon decline in gasoline prices this year, followed by a further 6% drop in 2026. "Lower US gasoline prices are primarily due to reduced crude oil prices and declining gasoline consumption in 2026 as fleetwide fuel economy improves," the EIA stated in a January report.

Oil Market Dynamics

Oil futures rose 1% on Wednesday, extending gains from the previous session as delegates from OPEC and its allies considered delaying their output increase for a fourth time. West Texas Intermediate crude hovered around $72.50 per barrel, while Brent futures traded above $76.

Potential Ukraine Impact

Traders are monitoring the potential impact of a Ukraine peace deal on the markets, as it could lead to the lifting of Western sanctions against Russia. "That could put downward pressure on oil," noted GasBuddy's De Haan.

Demand Concerns

Worries over a US-China trade war have also influenced prices, with Goldman Sachs indicating that persistent tariffs could weaken global demand and reduce oil prices in the medium term.