Traditionally, gas prices have risen in the spring and peaked during the high-demand summer months. Last year, though, prices spiked starting in February and reached their highs in early May, before declining slightly in summer. Has a new seasonal pattern been established?
The only real “pattern” here seems to be the absence of one that motorists can predictably rely on. Gas prices usually fall in February. But prices at the pump rose in February 2012, and did so again in February 2013.
So has there been a shift, in which the annual seasonal rise in gasoline prices now starts in February and continues increasing as the weather warms and more cars hit the road? Nope. Gas prices almost always rise in March. But, in a twist that’s perhaps even more surprising than prices increasing during the past two Februarys, the national per-gallon average dropped fairly sharply last month.
AAA announced that between March 1 and 31, gas prices dropped 15¢ nationwide. That’s the first time prices at the pump have dipped in March in 10 years—and when it last happened, in 2003, the decrease was a mere 1¢.
“Gas prices in March came in like a lion and are going out like a lamb,” wrote GasBuddy analyst Patrick DeHaan. “Essentially what we’re seeing here this month is perhaps the largest monthly decrease ever during the month of March — a month that has almost always seen prices finishing the month substantially higher than where they entered.”
Could it be that gas prices already hit their top levels for the year, when the national average was $3.79 near the end of February? Could drivers catch a break on fuel costs with cheaper prices for the rest of the year? That’s pretty unlikely.
“AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year,” AAA spokesperson Avery Ash announced in a statement.
Earlier this year, analysts predicted a national average of around $4 per gallon to appear by springtime. That would have essentially been a repeat of 2012, when the average hit $3.94 during the first week of April. Fast-forward a year, though, and the average is roughly 30¢ cheaper, at $3.637 as of April 2, according to AAA’s Fuel Gauge Report. GasBuddy originally forecast the national averages of around $3.95 for April and $3.85 for May; recently revised predictions stated averages of $3.65 to $3.69 through May.
What explains the surprising dip in gas prices in March, and equally surprising expectations of flat prices going forward? “An increase in refinery production and lower oil prices in early March have combined to provide rare falling prices for motorists in comparison to recent years,” explained AAA’s Ash.
In a CNBC post, Anthony Grisanti, founder and president of GRZ Energy Inc., wrote that we won’t be seeing record-high gas prices in the months ahead because unemployment remains high (meaning fewer people need to commute or have the cash to take road trips) and cars on the road today are far more fuel efficient than they were just a few years ago. Both factors keep demand for gasoline relatively low.
None of this means that gas prices are truly low. Drivers were paying 40¢ less per gallon as recently as December, after all, when the national average was around $3.25.