Gasoline
prices
are creeping back up and may soon average $4 per gallon, requiring
drivers
to start putting in more for fuel after having enjoyed falling prices for much of the second half of 2022.
The national average price of retail gasoline rose for the fifth straight week Sunday, according to data compiled by GasBuddy, with higher oil prices and lower refinery utilization being driving factors. The national average is up to $3.49 per gallon, a 33.3-cent rise from a month ago.
BIDEN OIL RESERVE REFILL PLAN WON’T WORK, INDUSTRY GROUP TOLD ADMINISTRATION
Oil
has seen fairly consistent gains
over the same period, and refineries have been operating at 86.1% of capacity or below since Winter Storm Elliot struck during the week of Christmas, according to the Energy Information Administration.
Other factors expected to weigh on prices going forward include the European Union’s
impending embargo of Russian petroleum product imports
and growing demand in China.
Completion of delayed refinery maintenance in the United States will also be a factor, said Patrick De Haan, head of petroleum analysis at GasBuddy.
“There appears to be little good news on the gas price front, with prices unlikely to turn around any time soon. Because of the surge in prices last spring, many refineries that had planned maintenance deferred maintenance until 2023,” De Haan said in a weekly market note.
“With the can kicked to this year, we may have similar challenges producing enough refined products to meet demand, especially with the European Union cutting off refined products from Russia starting February 5,” he added.
The rising prices are an unwelcome return for the Biden administration, which devoted much attention and political capital to reducing fuel prices throughout 2022, when the national average marked a new record high above $5 per gallon.
Fuel prices fell precipitously in the latter half of the year alongside falling oil prices, with a few week-to-week rises in between, something for which the administration took as a credit to its
use of the Strategic Petroleum Reserve
.
Most recently, the national average fell for seven consecutive weeks between November and January and reached the lowest level since February 2022, before the war in Ukraine began. That trend reversed beginning in early January.
The administration said last year after the Department of Energy began drawing down and selling reserve oil in compliance with President Joe Biden’s emergency order that it could pursue additional releases from the SPR if it were warranted.
The reserve’s contents are more than 41% lower than when Biden took office, owing to his emergency drawdowns and other nonemergency sales. Most of the barrels to be drawn down and sold were released as a response to the war in Ukraine and its effect on oil prices.
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DOE made issued one solicitation to begin refilling the reserve in December but rejected the offers it received, saying they didn’t meet the department’s specifications or desired purchase price.
