The new year is arriving with the highest January gasoline prices since 2014, and motorists could face an expensive ride for the rest of the year, according to the AAA Texas auto club and GasBuddy.com.
Local drivers on Thursday were paying an average of $2.19 per gallon for regular unleaded, up 2-cents from a week earlier and 10-cents since Christmas Day, said Patrick DeHaan, a petroleum analyst with GasBuddy.com, which monitors prices at 124 area outlets.
Turmoil in oil-rich Iran and frigid weather in the northeastern United States, which has boosted demand for heating oil, have contributed to the run-up in gas prices in recent days, DeHaan said. Waco’s $2.19 average was 30 cents below Thursday’s national average and 7 cents below what most Texans were paying at the pump.
“We rank the 25 markets with the lowest gas prices in the country, but I would guess Waco is about 27th or 28th,” he said.
At $2.11, Hammond, Louisiana, had the lowest average gasoline prices in the nation Thursday, though some stations in the South and Southwest even had prices below $2 per gallon.
DeHaan said it is not unusual for wholesale gas prices to fluctuate by 3 to 10 cents overnight, and retail prices typically reflect the changes.
“That is called the ‘spread,’ and we’ve noticed it getting wider in recent years, which is why pump prices seem to change so often,” DeHaan said.
The Murphy USA stations that operate next to Walmart locations on Hewitt Drive, on Interstate 35 in Bellmead and at Franklin Avenue and New Road were charging $2.09 to $2.15 a gallon for regular unleaded Thursday. The Sam’s Club in Bellmead was charging $2.09, and the Walmart on I-35 in Hewitt was charging $2.19, according to GasBuddy.com.
So five sites with Walmart ties were posting four prices.
“That’s why I tell people that if they don’t shop around, they are losing money,” DeHaan said.
Competition can push prices down, “but stations located in more affluent areas may take longer, or may not see the need, to respond to that pressure,” he said.
The AAA Texas auto club reported this week that Waco’s average of $2.22 per gallon stands 9 cents higher than the $2.13 average local motorists were paying this time last year.
Demand for gas may fall in the wake of the holidays, but any dip in demand is unlikely to last long, according to GasBuddy’s 2018 Fuel Price Outlook.
“The recent agreement by OPEC, Russia and non-OPEC oil producing countries to extend crude output curbs for all of 2018 appears to provide assurance that oil’s 2017 price rebound wasn’t a fluke,” he said. “Provided that global demand remains robust, the cartel’s assumption is that the elusive supply and demand balance will be achieved sometime in the year ahead.”
New markets are also likely to continue to open for U.S. petroleum products, “meaning exports will likely continue to ramp up, contributing to smaller inventory gains in the United States,” and sending prices higher, according to the report.
The typical American household will spend $1,898 on gasoline this year, a $133 increase from last year, and gas prices are likely to average $2.57 per gallon, according to the report.