Retail gas prices started the year at their highest level in four years, with some regional inventories at their lowest levels in seven years, a survey found.
Motor club AAA reports a national average retail price of $2.49 for a gallon of regular unleaded gasoline Wednesday, up about 4 cents from last week and 13 cents per gallon more than this date last year.
By AAA’s account, this is the most expensive start for retail gasoline prices since 2014, when the price at the pump was above $3 per gallon. The motor club predicted the year-end holiday season would be the busiest on record, driving up demand. With the holidays over, drivers could get some relief in the coming weeks as demand for gasoline tapers off.
“Although prices at the pump shot up over the holidays, now that the holiday season in the rear-view mirror, motorists can expect gas prices to trend cheaper this month as we are likely to see a significant drop in gasoline demand,” AAA spokesperson Jeanette Casselano said in a statement.
The West Coast market remains the most expensive in the country, skewed in part by taxes on consumer fuels that went into effect in California last year. California has the highest retail average in the Lower 48 at $3.10 per gallon, though gasoline inventories are “comfortable,” AAA said.
The situation is different for the Great Lakes states, which is usually the most volatile in the country. Pennsylvania and Michigan are among the five most expensive states in the country. Three states in the region were the only ones to see a spike in prices of 10 cents or more in a month and, at 48.1 million barrels, the gasoline inventory in the region is the lowest it’s been since the end of 2010.
Patrick DeHaan, a senior petroleum analyst at GasBuddy, said there are “several” refinery issues hindering output from the Great Lakes market. Some of the issues, he said, may be due to the extended bout of extreme cold gripping the region.
Energy prices in general are on the rise for consumers. The U.S. Labor Department reported average prices paid in November rose 2.2 percent from last year. Gasoline and energy-related costs accelerated the most when compared with other items like food, which saw a 0.6 percent increase from last year.
Consumer prices for all energy commodities are up 16.4 percent from late 2015.