2013 Gas Prices: Even Less Predictable Than Usual

What can drivers expect going forward in terms of gas prices? Probably more of the same—meaning more unpredictability, not necessarily more price drops.

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While gas prices always have some degree of unpredictability, there is generally a reliable (OK, reliable-ish) seasonal ebb and flow. Typically, prices at the pump rise hand in hand with temperatures. As days grow longer and warmer, drivers hit the road more. Demand for gasoline rises, as do prices, with steady increases mixed in with occasional spikes in spring and summer. Later, prices tend to retreat with the arrival of colder days.

That’s how things typically work. Thus far, 2013 hasn’t been remotely typical. Gas prices usually fall during the midwinter chill at the start of the year. This year, the opposite happened, with sharp increase in February. Prices almost never decline in March, but that’s exactly what happened this past March, resulting in a national average that was 30¢ per gallon cheaper than the year before.

According to this week’s Energy Information Administration report, the national average is around $3.53 per gallon, down 7¢ from a couple of weeks ago, and down 33¢ compared to a year ago. Normally, at this time of the year, gas prices are creeping upward as Memorial Day, and the warmth of summer, nears.

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And what can drivers expect going forward? Probably more of the same—meaning more unpredictability, not necessarily more price drops.

The Kansas City Star described 2013’s wild swings in gas prices as “the most volatile in at least a decade.” Things got especially screwy last week, when drivers on one side of Missouri were paying 27¢ per gallon less than customers on the other side, reportedly thanks to supply issues. “The traditional ups and downs in fuel prices have become more erratic,” AAA spokesman Mike Right told the Star.

“Get ready for a roller coaster,” said Steve Mosby, a partner with Admo Energy, which supplies gas stations and other retailers with gasoline. He was talking to a reporter in Missouri, but he could have been referring to Michigan, where the local AAA reported a price spike of 24¢ per gallon over the last week, due to flooding in the Midwest.

Over the weekend, a USA Today story offered the theory that due to continued low demand and slumping crude prices, the prices paid by drivers at the pump are “expected to fall another 20 cents a gallon by Memorial Day.”

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One of the experts cited in the USA Today story is GasBuddy’s Patrick DeHaan. Yet in a GasBuddy post published on Monday, DeHaan warned drivers that “gasoline prices have already started to move higher in some areas, and others will likely see their prices follow suit in the coming days.”

As long as we have all of that cleared up …

Then again, even as predictions of $4 gas by springtime appear way off now, most analysts forecast that gas prices in 2013 would be cheaper than last year. So far, that prediction is on target.