WASHINGTON, D. C. (Friday, March 2, 2018) –– Gasoline prices are trending upward with each passing day. Motorists are taking notice and they don’t like it one bit. The vast majority of motorists say they plan on changing their driving habits or lifestyle to offset higher gas prices in the months ago, according to a new survey by AAA. To their chagrin, pump prices are likely to increase throughout April, May and into the start of summer, AAA is forecasting. Talk about pain at the pump, the national gas price average will be as much as $2.70/gallon this spring – a costly pump price Americans have not paid since summer of 2015 when prices hit $2.81, AAA prognosticates. Retail prices are already above that price point in the nation’s capital.

For the sake of comparison, the national daily average price for a gallon of unleaded regular gasoline during 2017 was $2.39, notes AAA Mid-Atlantic. That means American consumers spent $933,734,760 per day fueling up a year. What is more, the annual amount consumers spent on gasoline in 2017 was $340,823,187,400. For the first quarter of the year, gas prices have been expensive. On average, motorists nationwide are paying nearly 25 cents per gallon more than this time last year. While pump prices have dipped in recent weeks, this is not a trend consumers should expect to linger.

The District has a scarcity of filling stations, with just 109 retail fuel outlets at the most. Yet the retail markup for gasoline in the nation’s capital is nearly 60 cents a gallon, says OPIS. In terms of fuel market profitability, Washington, D.C. will likely continue to top the list of the 10 best earning metro markets in the northeast region well into spring, outpacing the likes of New York City, Bridgeport, Boston and Newark, NJ.

“There is tremendous volatility in the oil and gasoline markets. Crude oil is selling at higher prices compared to previous years and domestic gasoline demand has been high most of the winter. These are among the factors driving gas prices up and draining consumers’ wallets,” said John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs. “This spring, consumers may have to make decisions on where they can cut costs to cover gas prices that are potentially 40 cents more per gallon.”

CURRENT AND PAST GAS PRICE AVERAGES 
Regular Unleaded Gasoline

A new AAA survey finds the vast majority of motorists would change their driving habits or lifestyle to offset higher gas prices. One in four consumers says he or she would start making changes at $2.75, while 40 percent say $3.00 is their tipping point. Changes consumers said they would make include combining errands or trips (79 percent), driving less (73 percent), reducing shopping or dining out (61 percent), delaying major purchases (50 percent) and driving more fuel-efficient vehicles (46 percent).

Pump prices will average $2.70 per gallon across the United States during springtime, AAA is forecasting. The mark-up on the cost of gasoline in the District makes the city one of the most lucrative places on the East Coast to sell gasoline. During the period from February 20 to February 26, the city’s retail cost was an average of $2.75 per gallon, yet the rack price or spot price over at the terminal in Northern Virginia was only $1.74 per gallon, and the average net price was $2.31 per gallon. So D.C.’s average profit margin was 57 cents a gallon, according to the Oil Price Information Service (OPIS). Maryland’s average cost is expected to spike as well, but to a price that is anticipated to be several cents lower than the national average. The statewide average typically trends lower against the national average price at the pump.

If current trend lines continue, pumps prices in Virginia will be well below the retail cost of gasoline in the nation’s capital, Maryland and the nation. By the way, AAA does not expect the national gas price to be reminiscent of 2011-2014, when motorists were paying on average $3.47 per gallon. While some states, like California, may see $4.00 per gallon, it will be temporary. 

“Motorists will start to see gas prices make their spring spike in early April,” said Townsend. “That is when refinery maintenance is expected to be wrapped-up and the switchover to more expensive summer-blend gasoline kicks in along with warmer weather and typical demand increases.”

Fuel Savings Tips for Consumers

On average, Americans drive 32 miles a day and spend 51 minutes behind the wheel, according to the AAA Foundation for Traffic Safety’s American Driving Survey. Accordingly, AAA offers a few ways to conserve fuel:

• Slow down. The faster you drive the more fuel you use. Every 5 mph over 50 mph is like paying an additional $0.18 per gallon, according to the Department of Energy.
• Share work or school rides by carpooling or consider public transportation.
• Do not use your trunk for storage. The heavier your car, the more fuel it uses.
• Combine errands. If possible, park in a central spot and walk from place to place.

Summer Look Ahead

Bad news on the door step. AAA expects summer gas prices to be just as expensive as spring prices, but with the potential that they may not increase at such a quick rate. Heading into summer, a variety of factors including U.S. gasoline supply-demand levels, domestic gasoline production rates, and global crude demand will help better shape the summer forecast. 

Oil Market Dynamics Overview

Since December, the crude oil market has been on a volatile ride. West Texas Intermediate (WTI) crude prices hit a closing high of $60 per barrel in late December and continued to climb into 2018 up to $70 per barrel, translating into expensive gas prices this winter.

However, when the financial markets began to fluctuate in February, oil prices took a hit and have been mostly trending cheaper – between $59 and $62 per barrel – and gas prices are following suit. WTI crude oil closed at $61.30 per barrel yesterday, down 25 cents from the previous day’s close.

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AAA provides automotive, travel and insurance services to 57 million members nationwide and nearly 78,000 members in the District of Columbia.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit  https://aaa.com