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HomeAt Home & BeyondGas Prices Are Spiking Again – What the Experts are Forecasting for...

Gas Prices Are Spiking Again – What the Experts are Forecasting for 2023

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Floridians have been feeling more pain than usual in their wallets recently as gas prices are again on the rise. By the end of last December, gas prices nationwide had been steadily declining, with prices locally hitting a low of around $2.85 per gallon. Unfortunately, just as many were breathing a sigh of relief, fuel prices again began trending upwards. On Tuesday last week, local residents awoke to find the three-week “steady” rise in fuel prices wasn’t so steady, as prices at several area gas stations shot up twenty cents per gallon or more literally overnight. Many stations in Hernando County were advertising regular gas at $3.59 per gallon or more – a rise of .74 cents per gallon in just under four weeks. As it turns out, the sudden price surge wasn’t limited to just Florida, as residents in many US states reported the same or worse.

If you are wondering what is causing the increases, the answer depends on who you ask. Spring Hill landscaper Anthony Callari said that rising fuel prices, which he attributes to recent pipeline closures, have made it hard for him to stay in business. Callari said that his fuel costs have doubled or more in the last two years. Until now, Callari has been absorbing much of that cost but said he is now at the point of having to pass those increases along to his customers.

Most experts seem to agree that the reason for higher fuel prices lies in a rising global demand for oil, which in turn is driving up oil prices. AAA spokesman Andrew Gross pointed out that drivers had been taking advantage of recent milder weather in much of the US and “hitting the road.” This, “in combination with oil prices again hitting $80 per barrel, was putting a lot of upward pressure on gas prices,” he said.

In the broader picture, analysts point toward the reopening of China’s economy. Largely dormant until now due to COVID outbreaks in that country, China’s economy is getting back to business and is increasing global crude demand. This circumstance only helps sustain already elevated prices. As a result, some analysts believe that oil prices could continue to climb if world market optimism persists.

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Patrick De Hann, head of petroleum analysis at Gas Buddy, says he believes several factors will drive fuel prices this year. While the reopening economy in China remains at the top of the list, he says that “Refineries are going to be a story in the year ahead. Currently, refinery capacity is increasing, but all it takes is one key refinery (going offline) to make prices jump,” De Hann said. As a case in point, De Hann points to the Whiting, Indiana, refinery electrical fire in 2022. Fuel prices rose almost instantaneously over 10 cents per gallon due to that one-week closure.
De Hann also sees the potential of the ongoing war in Ukraine affecting prices. However, he noted that it is very hard to tell how or when the war may affect prices at the pump here.

Gas Buddy analysts predict that, barring unforeseen events, fuel price patterns in 2023 should return to normal seasonal fluctuations, rising in the spring and dropping after Labor Day into the fall. Those same analysts predict a national average price peak of around $4.19 per gallon by June. Some see Tampa Bay region prices peaking around $4.39. “2023 is not going to be a cakewalk,” De Hann said. “It could be expensive.”

A local gas station price sign reflects a 20 cent increase in a 24 hour period. Photo by Mark Stone.

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