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Gasoline prices have hit a four-month high as warmer weather encourages drivers to get back on the road.
Part of the problem, said energy analyst and FOX Business contributor Phil Flynn, is that refineries are being inundated with demand at a time when they are facing unprecedented challenges.
Flynn told FOX Business that drivers are switching from winter blended gasoline to summer blended gasoline, but blended gasoline is more expensive, adding 10 to 15 cents per gallon to the price. This year it could be even higher.
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In February, energy prices soared for the first time in months, further increasing pressure on household budgets. Prices rose 2.3% for the month, including a 3.8% rise in gasoline prices.
As of Tuesday, the national average price for regular gasoline was $3.39 per gallon, according to AAA’s latest data. A month ago, the price was $3.19. But prices are still below levels from a year ago (about $3.47), according to AAA.
AAA spokesman Andrew Gross said this is a seasonal increase, with summer prices typically peaking around June or July and then declining.
But Flynn warned that people are still feeling the effects of supply disruptions from various refinery outages, including the Whiting BP refinery in Indiana and the U.S. Gulf Coast refinery in Texas. did. Flynn also pointed to a fire at the Wood River refinery in Roxana, Illinois, which further tightened supply.
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Typically, “even in the worst-case scenario, a refinery could be shut down for two weeks, maybe three weeks, and then come back online and start delivering product,” Gross said. But the Whiting BP refinery in Indiana shut down in early February.
Summer gas prices typically peak around June to July and then decline. (Sven Hoppe/Photo Alliance via Getty Images/Getty Images)
“The fact that gasoline crude oil and diesel fuel supplies are below domestic and international averages, on the back of OPEC production cuts, is setting the market up for further gains heading into the summer driving season,” Flynn said. ” he said. .
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If things don’t improve in the U.S. refining industry, “we could see a continuation of the rise in gasoline prices that we’ve seen in the past,” Flynn said. He added that if oil prices rise above $80 a barrel (which we think is likely), “that will put further upward pressure on gas prices as we enter the middle of the summer driving season. ” he said.
FOX Business’ Megan Henney contributed to this report.
