Gas prices headed lower

The Energy Department and AAA predict a drop this year, but they don't account for variables like storms or wars.

By Jason Notte Jan 14, 2013 9:27AM

Filling fuel tank -- CorbisFor perhaps the first time since the fiscal cliff debates began, the government has come up with an item whose price won't increase in 2013: gasoline.


Thanks to high supply and weakened demand, the average price per gallon should fall to 5% to $3.44, according to the Energy Department. That's still well above the dreaded $3-a-gallon mark and the third highest average fuel price ever, but it's 19 cents lower than last year's record $3.63 average.


It's also an average savings of $205 per household in 2013, which theoretically could put $25 billion back into other areas of the economy -- or, you know, into Americans' savings. That's assuming the Middle East doesn't flare up again, the hurricane season doesn't yield another Superstorm Sandy and the nation's refineries stay open and keep running at capacity.


It also ignores the expiration of last year's payroll tax deduction, which increases the Social Security levy from 4% to 6% this year and will cost households making $40,000 to $50,000 an extra $600 in 2013, according to the Tax Policy Center. Also, the Energy Department's recent history with this kind of prognostication has been spotty at best. In 2011, it predicted average gas prices around $3 just before Libya's revolution halted oil production and drove the national average to $3.53. Last year's prediction was $3.45, which also fell more than a little bit outside the mark.


AAA is steering away from the government annual average and, instead, is focusing on upcoming fluctuations in fuel prices. While AAA's average U.S. gas price sits at $3.31 per gallon, the motorist organization predicts that price could go as high as $3.80 this spring before dropping to $3.20 in mid-summer. That would be the lowest average gas price Americans have paid since February 2011, but may be short-lived depending on what hurricane season brings.


Of course, those prices are also still highly contingent upon where drivers live. Right now, drivers in Utah have the lowest gas prices at an average $2.88 a gallon, while New Yorkers are still dealing with Sandy's aftermath as they pay $3.75. One region's year of cheap gas could be another area's fuel crisis.


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86Comments
Jan 14, 2013 12:37PM
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Gas should be at about $1.75 to $2.00 a gallon right now. The reason it isnt is because of way too many things to list. People claim it isnt political, but politicians are to blame for most of it.

 

They can and should write a law that takes oil futures off the market. Trading in futures is keeping the price inflated and making the rich political donors even richer.

 

Next, allow refineries to add capacity. The New Liberal hates the idea, but the economy is stuck right where it is until we start seeing gas prices where they belong. The EPA is killing this county and costing every person living here thousands of dollars a year. Why do we accept it? We shouldnt.

 

Now, here is the big one. Use the oil we have here. Drill it, refine it and sell it. If that doesnt kill the market profit grabbers, nothing will. It is hard to shore up an inflated price when there is more of a product than we can use. Import and use domestic. Imagine the price battle we'd see then. It would definately put free market back in oil. Remember how it used to be? It could be like that again. Imagine gas stations lowering their prices to compete with the other stations instead of raising their prices to keep up with other stations.

 

 

Jan 14, 2013 12:22PM
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LMAO....yesterday MSN had an article on line that said gas was going up and today its predicted to be going down.  These people at MSN are clueless.
Jan 14, 2013 1:27PM
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Oil sits at rail  sidings in tx, ok, nm, ks az, refinearys are at full capicity, national reserves are near full capicity, why is crude traded on futures market  where speculators can manipulate price for their gain. bakken reserves are now coming in production, canadan oil sands are able to pump oil into usa as well as all of canada. there is no reason why gas should be more than  $2.25 -2.50 /gal
Jan 14, 2013 11:59AM
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More BS.....yesterday an article said gas went up 6 cents the last couple weeks.....as I've written before...I won't be excited about it until it gets under $2.50/gal.
Jan 14, 2013 11:40AM
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Everytime I read an article like this it means bend over and wait to have it broke off in you again. Nice try but NOBODY is buying it. Just more CORRUPT AND MANIPULATED BULL$HI#!!!!!
Jan 14, 2013 12:14PM
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The biggest scam / rip-off in the history of the world: oil companies get oil from public lands, our oil, then sell it back to us at $4 a gallon or whatever price they feel like that month. They are all nothing more than a bunch of market manipulating Enrons.

Jan 14, 2013 1:53PM
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STOP speculation on oil. Write a law that ban oil trading.
Jan 14, 2013 12:15PM
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Yesterday you wrote it was going up 6 cents and now this.  Get your heads out of your a$$es.
Jan 14, 2013 2:48PM
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Get gas down to a buck and a quarter a gallon and watch this economy hum again.
Jan 14, 2013 2:58PM
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Whoever came up with the bright idea of putting a commodity like oil that we all need to live in the hands of Greedy Wall Street Traders and Speculators should be deported. This was a stupid move that has hurt and will continue to dominate our economic downfall.
Jan 14, 2013 12:15PM
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Yeah where???? Gas went up 7 cents over the weekend here..  Its all spin my friends so( he) looks like he is trying to do something to help you,,,BS he could give a crap about us, in fact there is'nt anyone in side the belt way that cares about you except when it comes to your vote and then it's all peaches and cream
Jan 14, 2013 11:43AM
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I watched the news this morning and they said the national average price for gasoline was expected to rise again and was up 7 cents from last week. The only way to beat the beast is for the government to move forward with a natural gas vehicle conversion policy. It would make the US energy independent years ahead of current projections and we would have greater price stability.
Jan 14, 2013 12:03PM
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They said gas prices would fall during the holiday season last year $3 a gallon in some places; didn't happen. As soon as the holiday season was over prices started climbing. Weakend demand and high supply don't seem to drive prices down. So what could be driving prices up?
Jan 14, 2013 1:07PM
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Yep, went up 7 cents here in the last week. You just have to love the experts and so called authorities forecasts, when as they are saying them, the opposite is happening. I don't trust anything I read, and only  half of what I see.......
Jan 14, 2013 11:32AM
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Just a idea  when is some one going to call these oil companies out we are get it shoved big time they just raised the price because it got cold in china this is crap iam i the only one tierd of this
Jan 14, 2013 1:52PM
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fzcleve bull we have plenty of oil nat gas and coal let's use it 5 million jobs energy independence bring our troops back from the middle east makes to much sense fz

Jan 14, 2013 2:05PM
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What BS every body knows that as the economy improves gas prices will raise. The Obama administration missed a golden opportunity too use the stimulus money too create a natural gas distribution system across the U.S.. Installing natural gas pumps at every truck stop and providing tax incentives for truckers too convert would have been a great start.
Jan 14, 2013 3:52PM
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The Oil Barons,

Lest we forget, one of the biggest crooks to ever come down the pike in our industrial age was none other than John D Rockefeller. In the late 19th century his tactics and ploys created the Standard Oil Co which consolidated all aspects of the petroleum industry... from the wellhead and the transport of crude to refining and the retail of gasoline. He became the world's very first Billionaire in 1892 and his strategies regarding the petroleum industry literally wrote the 'play book' for all of the oil barons who have dutifully followed in his footsteps. As it was 120 years ago, it remains true today. The obscene and enormous profits of the oil industry enable it to purchase all of the power in high places in order to dictate petroleum business policy and to maintain their gluttonous profit-imperative at all costs. If he were here today John D would be very proud indeed of his legacy.

Peace to all ~

 

Jan 14, 2013 12:43PM
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In the Phoenix, AZ area, I had seen the gas price just below the $3 dollars mark as I was visiting from Philadelphia which are averaging 45 cents above the $3 mark.  I have never seen it below $3 in 4 or 5 years!  
Jan 14, 2013 2:36PM
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MSN is a joke and beware if you disagree with their libtard values they will kick you off...
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