This year, you may end up paying more for gas than you’d thought — at least, if the Department of Energy’s projections hold true.
Last month, the DOE predicted that Americans would pay an average of $3.44 per gallon of unleaded regular gasoline over the course of 2013. Now, that figure has crept up 11 cents to $3.55.
Why the change? For starters, the price of crude has jumped $10 per barrel in the last two months, which has caused gas to increase by about $0.24 per gallon. That upward trend wasn’t helped by refinery outages in the U.S. and Europe in January.
As a result, gas started this week at $3.61 per gallon, which, as the DOE notes, is “the highest nominal retail price ever for this time of year”. That, in turn, has caused the DOE to bump up its estimate of how much Americans will pay for gas in 2013.
Sadly, gas prices aren’t expected to slide much over the next few months. The DOE expects them to peak at $3.73 in May, just before the June changeover to summer blend.
(Ironically, even though summer blend gas is more expensive to manufacture, its arrival usually brings about a drop in gas prices. That’s largely because once refineries switch to manufacturing summer blend, the supply of “regular” or “winter blend” gasoline begins to decrease. And as demand remains constant while supply declines, prices rise. Once summer gas arrives, supply returns to normal.)
The good news is that 2014 may be a little easier on your wallet: the DOE predicts that next year, motorists will pay an average of $3.39 per gallon of gas. Though the DOE’s rationale for that drop isn’t entirely clear, the agency expects U.S. demand to slide from 8.73 million barrels of gasoline per day in 2013 to 8.72 million barrels per day in 2014. And a slide in demand should, in theory, should result in a slide in prices.
Why the declining demand for gas? It could be because the fuel efficiency of our cars is on the rise. Then again, if the U.S. economy continues to recover, motor travel will likely increase, negating any drop in demand for gas caused by fuel efficiency improvements.
This article originally appeared at The Car Connection.