2012 Is Back on Pace to Be the Most Expensive Year Ever for Gasoline

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When it comes to gas prices, the “all-time high” is one record that drivers hope won’t be broken anytime soon. Last year proved to be the priciest ever for gasoline, with an overall national average of $3.53 per gallon, and now it looks like this year will surpass 2011’s mark and take the unfortunate title.

Choose your metaphor—soap opera, rollercoaster, whatever. Thus far, 2012 has been a dramatic, topsy-turvy, up-and-down year for gas prices. More up than down, actually.

The year started off with a sharp rise in prices at the pump, accompanied by predictions of $4 gas around the country by spring. Back then, the possibility of 2012 being the priciest year ever for gasoline seemed all but guaranteed.

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By the start of summer, though, gas prices had gone into reverse, and forecasts called for $3 gas by the fall. More recently, prices shifted gears yet again, thanks to refinery problems in the Midwest and California, causing fuel costs to rise once more. As of Wednesday, the national average was $3.71 per gallon, up from $3.40 one month prior—and up from $3.59 at this time last year.

Overall for 2012, reports USA Today, the average price nationally for a gallon of regular now stands at $3.61. Despite longer-term projections that gas prices will drop again once the refinery issues are no longer issues, it appears likely that prices will keep rising incrementally at least through Labor Day.

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Lately, it’s California drivers who are seeing prices soar seemingly by the hour. According to the Energy Information Administration (EIA), the average gallon of regular was selling in the Golden State for $3.80 as recently as July 30, and now costs about $4.10. The Midwest has been similarly been hit hard, with prices averaging $3.51 on July 30, and $3.79 lately.

Demand for gasoline usually falls off every autumn, and prices tend to follow the trajectory of temperatures—decreasing in autumn and winter, then rising in spring and summer. The EIA also reports that gasoline consumption in the U.S. in the first quarter of 2012 was down compared to the same period the previous year. In theory, as demand and consumption fall, prices should do the same. But sometimes that doesn’t happen. Gas prices usually decrease in February, typically a low-demand and low-price month at the pump, but prices took off skyward in February of 2012.

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So while there are several valid reasons gas prices should decrease after Labor Day, no one can be quite sure they actually will decrease once vacation season is over and kids are back in school. And unless they drop through the fall, get ready for 2012 to officially be named the most expensive year ever for gasoline.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

8 comments
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Vaengineer
Vaengineer

And if I was to take a wild guess, I would say that after 2013 we'll be saying the same thing about that year.  All the 'low hanging fruit' of easy to drill and pump oil is gone.  Now we are looking in the Artic, pumping chemicals in the water to 'frack' it out, going hundreds of miles off shore in Brazil, or using millions of gallons of hot steam to drip it out of shale formations. 

Raymond Chuang
Raymond Chuang

 Actually, with dry-electrode lithium-ion and ultracapacitor batteries, we may see a tremendous jump in the range of electric cars over the next eight years. It's possible by 2020 an electric car about the size of a Volkswagen Golf with the battery pack only about same volume size as the current Golf's gas tank could go as far as 800 km (497 miles) on a single charge; if that becomes reality, the days of dominance by gasoline and diesel fueled automobiles will be over--not to mention we'll get way better air quality in the cities (no having to breathe any form of gasoline/diesel engine exhaust).

AnonymousViews
AnonymousViews

The gas prices are one of the most baffling thing to me. The reasons mostly given for gas prices going up are that we there is a supply-demand problem and dependence on imported oil. Lets look at both. The supply-demand doesn't change drastically year on year and month to month. I was reading how shale-oil has actually reduced our dependence on foreign oil by some 25 to 30%. So where the f is the problem. As much as I hate to say it, the problem is the markets. Today prices of anything in market are mostly driven by rumors. Today rumor is iran is going to be attacked and tomorrow rumor is syria is going to be attacked day after it is some statistical projection of demand or supply which frankly can be modified either way. Don't get me wrong sensible reasoning plays about 10 to 15% or role in market. Rest is either rumors, casino style betting or what most people don't know is software also known as High Frequency Trading. I believe in market mechanisms but today's market simply seem like a casino. 

Darrel K.Ratliff
Darrel K.Ratliff

wonder which of the big pacs are now also big investors in gas futures driving the price so high even the 1% of 1% feel the pinch and the campaigns will have to revert to car pooling and both candidates at one location??

YankeeSkeptic
YankeeSkeptic

Gee, that's odd.  In 2008, when gas prices rose, it was a "Big Oil" conspiracy led by then-President Bush and VP Cheney.   In 2012,  gas prices are the result of mundane supply-and-demand, and President Obama is impotent to affect gas prices.

AdrianarmtRoben
AdrianarmtRoben

 Carl answered I'm alarmed that someone can earn $8801 in one month on the network. did you see this(Click on menu Home)

tel00
tel00

 You must be a republican.  A democrat would say the opposite. 

Ah, confirmation bias.  Is there no problem you can blame on the other guy?