Gasoline Prices Expected to Rise Amidst West Coast Refinery Issues

Gasoline prices are anticipated to increase in the coming weeks due to refinery maintenance and outages, primarily in California. This impact is compounded by the seasonal switchover to more costly summer fuel blends.

Current Gasoline Price Trends

As of Wednesday, the national average gasoline price stood at $3.16 per gallon, reflecting a 0.04% increase from last month and an 0.11% decrease from the same period last year (AAA). However, the West Coast has seen significant price surges.

Influencing Factors

Patrick De Haan, Head of Petroleum Analysis at GasBuddy, attributes the price increases to West Coast refinery maintenance and outages. These interruptions have had ripple effects on neighboring states.

Projections for Gasoline Prices

De Haan predicts a national gas price rise of $0.25 to $0.60 between now and mid-April. Tom Kloza, OPIS Global Head of Energy Analysis, anticipates an increase of $0.20 to $0.33 per gallon, with prices peaking around Easter or Cinco de Mayo.

Seasonal Factors

Refineries are currently undergoing seasonal maintenance, reducing supply. Moreover, the Martinez refinery in Northern California has been shut down since a February fire.

Summer Fuel Blend Transition

The annual switch to summer fuel blends, which are more expensive, will further pressure prices. California already has the highest gasoline prices in the US due to environmental initiatives.

Future Forecast

Kloza predicts lower retail gas prices in the second half of the year. The Energy Information Administration projects a $0.11 per gallon (3%) decline in gasoline prices in 2025, with a further 6% drop in 2026, citing lower crude oil prices and reduced gasoline consumption.

Oil Market Impact

Oil futures rose 1% on Wednesday, extending gains from the previous session. OPEC and its allies are considering delaying their output increase. The potential impact of a Ukraine peace deal and the easing of sanctions on Russia are also being monitored.

Conclusion

Gasoline prices are expected to rise in the near term due to West Coast refinery issues and the seasonal fuel blend transition. However, long-term projections indicate lower prices in the second half of 2025 and beyond.