Low gas prices may be fleeting in Washington

AAA predicts they will rise by 50 cents or more per gallon

By Gordon Oliver, Columbian Business Editor

Published: December 24, 2015, 12:45pm

(Associated Press files)

Gasoline costs less in Vancouver now than it did a year ago, with prices having gone up midyear and back down in the fall as a surplus of crude oil saturated the wholesale market.

But AAA says Northwesterners should not become complacent about lower prices. Although prices could stay low or even drop in January, AAA predicts they could rise by 50 cents per gallon or more before winter’s end as refineries take on maintenance work in preparation for the summer driving season.

But with crude prices stuck around $35 a barrel, no one is predicting a spike in prices anytime soon. The U.S. Energy Administration, in its most recent report on Dec. 8, forecast U.S. regular gasoline retail prices to average $2.04 per gallon this month and $2.36 for 2016.

A year-end review of average daily gas prices based on data from AAA Oregon/Idaho shows that a gallon of regular unleaded gasoline cost $2.67 in Vancouver in December 2014 and is selling for $2.36 this week. Over the course of the year, the local price hit bottom at $2.11 on Jan. 26 and peaked at $3.18 on July 13, based on a review of average gasoline prices on Mondays only. Prices in Vancouver tracked within pennies of the statewide average gasoline price throughout the year.

The low prices are well below Vancouver’s all-time peak average price of $4.35 on June 28, 2008. Shortly after that peak in Vancouver and similar peaks nationwide, prices fell dramatically as a deepening recession cut into travel and consumer spending.

Nationally, gasoline prices were far lower than Northwest prices throughout the current year. The gap has widened this fall: The difference between the national and Washington averages was 29 cents at this time last year and it’s 43 cents this week.

The U.S. average for a gallon of regular unleaded gasoline this week dipped below $2 per gallon for the first time since 2009, AAA reported. The statistically minded might quibble with that number: an average price of $1.9979 easily rounds to $2. But no one is complaining.

Of course, a nationwide average reflects a wide range of highs and lows. California’s average is $2.72 per gallon, the second-highest in the nation after Hawaii. Washington’s average is the fourth-highest and Oregon comes in sixth place. The faraway states of Missouri ($1.77), Oklahoma (1.78) and South Carolina ($1.78) have the lowest prices.

Marie Dodds, government and public affairs director for AAA Oregon/Idaho, said the higher West Coast prices reflect the impact of relatively low Northwest refinery capacity and California’s stringent environmental standards. The West Coast produces about as much gasoline as it consumes, so retailers are forced to buy more expensive gasoline from the wholesale market during unexpected refinery shutdowns or other temporary shortages, Dodds said. In addition, gasoline coming from California refineries is more expensive because of the state’s stricter environmental standards, she said.

The generally lower gasoline prices this year and an improved economy are contributing to increased travel. AAA is projecting a record holiday travel season, with 100.5 million people traveling more than 50 miles from home between Dec. 23 and Jan. 3. That’s a 1.4 percent increase over last year.

Gordon Oliver

Columbian Business Editor

@col_goliver

(360) 735-4699

gordon.oliver@columbian.com

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