Memorial Day weekend, known not only as a time for hitting the road but also the kickoff to the summer road trip season, has always been regarded as a key moment for gas prices. This year, the national average for a gallon of regular is almost exactly the same as it was for Memorial Day 2012. And yet, for the past two years, the periods leading up to Memorial Day couldn’t be more different. In 2012 and 2013, the first two months of the year were both marked by increases in prices at the pump, including curiously sharp spikes in February, despite relatively low demand in the marketplace. That’s when the similarities in 2012 and 2013 gas prices end. In March 2013, trends shifted gears compared to the year before. Gas prices almost never drop during the month of March, and sure enough, they rose swiftly in March 2012. Fast-forward a year later, however, and prices at the pump dipped significantly in March 2013. By early April 2013, the national average was around $3.64, 30¢ cheaper than the year before. Prices continued dropping throughout the month, reaching roughly the $3.50 mark. (MORE: Peak Traffic Ticket Season Is Here: Police Pushed to Give More Seat Belt Citations) More recently, gas prices have been on the rise around the country—and especially in the Midwest and California. Thanks to refinery outages, the statewide average in Minnesota hit $4.27 per gallon this week, an all-time high for the state and the highest average in the Lower 48, according to the Minneapolis Star-Tribune. GasBuddy noted that drivers in North Dakota were also paying all-time highs for gasoline, and much of the Midwest was nearing record high gas prices just in time for Memorial Day. The latest Energy Information Administration report states that the national average jumped roughly 14¢ over the past two weeks, thanks in particular to prices spikes in the Midwest and California, where a gallon of regular jumped 18¢ in two weeks. Around this time last year, by contrast, gas prices were decreasing
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MPG Rising: When Regulations Drive Up Prices—And Consumers Don’t Mind
If there’s one thing Americans would seem to hate more than regulations, it’s regulations that directly result in them spending more money out of pocket. So why are so many consumers fans of new government-mandated automobile mileage standards that do just that? Last summer, a study commissioned by an auto dealership association warned that as government regulations mandating better mileage for new automobiles took effect, the price of a new car could go up by over $12,000 in a worst-case scenario, making the purchase unaffordable to nearly 15 million Americans. Others estimated that the mileage standards would push new-car prices up perhaps $1,000 by 2016, and increase the average purchase price by $2,000 to $3,000 by 2025. At first glance, this is the sort of government regulation that consumers might absolutely loathe. It’s meddlesome, causing prices to rise and removing decision-making powers from manufacturers and shoppers alike. And yet many consumer groups have voiced strong support for the mileage standards—Consumer Reports, for example. A new Consumer Federation of America survey shows that the vast majority of consumers themselves are also now on board with the standards, which will push the average new car to hit the 35 MPG mark by 2017, and up to 54.5 MPG by 2025. In the survey, 85% of Americans said they support the requirements. More than 9 in 10 Democrats (92%) are in favor of the government-mandated fuel-economy standards, as are 77% of Republicans. (MORE: Light Switch: Why You’ll Start Using LED Bulbs This Year) There’s no great mystery as to why consumers across the political spectrum support the regulations: The standards just so happen to align with consumer purchase preferences. In the survey, 88% of respondents said that gas mileage would an important factor in what car they purchased next, and 83% said they were worried about gas prices over the next five years. Average car MPG has been creeping upward for years, and the trend seems to have more to do with what consumers want as opposed to what automakers are being forced
2013 Gas Prices: Even Less Predictable Than Usual
While gas prices always have some degree of unpredictability, there is generally a reliable (OK, reliable-ish) seasonal ebb and flow. Typically, prices at the pump rise hand in hand with temperatures. As days grow longer and warmer, drivers hit the road more. Demand for gasoline rises, as do prices, with steady increases mixed in with occasional spikes in spring and summer. Later, prices tend to retreat with the arrival of colder days. That’s how things typically work. Thus far, 2013 hasn’t been remotely typical. Gas prices usually fall during the midwinter chill at the start of the year. This year, the opposite happened, with sharp increase in February. Prices almost never decline in March, but that’s exactly what happened this past March, resulting in a national average that was 30¢ per gallon cheaper than the year before. According to this week’s Energy Information Administration report, the national average is around $3.53 per gallon, down 7¢ from a couple of weeks ago, and down 33¢ compared to a year ago. Normally, at this time of the year, gas prices are creeping upward as Memorial Day, and the warmth of summer, nears. (MORE: Just How Often Are Car MPG Claims Inflated?) And what can drivers expect going forward? Probably more of the same—meaning more unpredictability, not necessarily more price drops. The Kansas City Star described 2013′s wild swings in gas prices as “the most volatile in at least a decade.” Things got especially screwy last week, when drivers on one side of Missouri were paying 27¢ per gallon less than customers on the other side, reportedly thanks to supply issues. “The traditional ups and downs in fuel prices have become more erratic,” AAA spokesman Mike Right told the Star. “Get ready for a roller coaster,” said Steve Mosby, a partner with Admo Energy, which supplies gas stations and other retailers with gasoline. He was talking to a reporter in Missouri, but he could have been referring to Michigan, where the local AAA reported a price spike of 24¢ per gallon over the
Gas Prices Almost Never Decline in March—But They Did Last Month
Traditionally, gas prices have risen in the spring and peaked during the high-demand summer months. Last year, though, prices spiked starting in February and reached their highs in early May, before declining slightly in summer. Has a new seasonal pattern been established? The only real “pattern” here seems to be the absence of one that motorists can predictably rely on. Gas prices usually fall in February. But prices at the pump rose in February 2012, and did so again in February 2013. So has there been a shift, in which the annual seasonal rise in gasoline prices now starts in February and continues increasing as the weather warms and more cars hit the road? Nope. Gas prices almost always rise in March. But, in a twist that’s perhaps even more surprising than prices increasing during the past two Februarys, the national per-gallon average dropped fairly sharply last month. AAA announced that between March 1 and 31, gas prices dropped 15¢ nationwide. That’s the first time prices at the pump have dipped in March in 10 years—and when it last happened, in 2003, the decrease was a mere 1¢. (MORE: Buy an Electric Car, Get a Gas-Powered Car for Free) “Gas prices in March came in like a lion and are going out like a lamb,” wrote GasBuddy analyst Patrick DeHaan. “Essentially what we’re seeing here this month is perhaps the largest monthly decrease ever during the month of March — a month that has almost always seen prices finishing the month substantially higher than where they entered.” Could it be that gas prices already hit their top levels for the year, when the national average was $3.79 near the end of February? Could drivers catch a break on fuel costs with cheaper prices for the rest of the year? That’s pretty unlikely. “AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year,” AAA spokesperson Avery Ash announced in
Buy an Electric Car, Get a Gas-Powered Car Free
A buy-one-get-one-free special on cars? Not exactly. To ease consumer concerns about the limited driving range of electric vehicles, two automakers are giving buyers free access to traditional gas-powered rental cars and loaners throughout the year. For many drivers, purely battery-powered electric vehicles remain an impractical choice because the typical EV must be recharged after every 80 or so miles on the road, and because four or more hours are required for a full recharge. Automakers have rolled out offers such as free included auto insurance, cheap lease deals, and simple price cuts and cash rebates to convince consumers they can live with “range anxiety” and the other downsides to EVs. A $7,500 federal tax credit and state incentives of up to $2,500 make the electric car math even more enticing. And of course, owning an electric vehicle comes with the possibility of saving thousands annually on the costs of “fueling” their cars. (MORE: Car Buying, Reenvisioned: More Like Shopping for Apple Gadgets, Ice Cream, or a Date) Even so, the idea that you won’t be able to take your car on a hassle-free road trip from time to time is a deal breaker for many. But what if drivers had free access to an extra car—one that runs on gas and could be taken on longer trips without a problem—when the need arose? BMW, which is expected to start selling the electric-powered i3 this fall in the U.S., estimates that driving range is not a problem during 90% of the average driver’s day-to-day trips. To help EV owners cope with the 10% of outings when “range anxiety” would be an issue, the automaker is planning to include complimentary loaner cars with each i3 purchase. “Although the program will be free, there will be a limit to the number of times a customer could use a loaner car in a year,” Edmunds.com reported. According to Automotive News, Fiat is trying to negate the “range anxiety” factor by offering 12 days per year of free rental cars with Enterprise with the
Could It Be? Gas Prices Are Around 25¢ Cheaper Than Last Year
The current national average per gallon of gas, $3.65, probably doesn’t seem all that cheap. Not compared to the beginning of the year, when prices were 10% cheaper. And especially not compared to a few years ago, when gas sold for under $2. So some drivers are surprised—and a bit skeptical—to hear that prices are significantly less than a year ago at this time. According to the AAA Fuel Gauge Report, the national average for a gallon of regular was $3.65 as of Wednesday. Exactly one year prior, the average measured $3.898, about 25¢ more. What’s more, in recent weeks, gas prices have declined all over the U.S. Gas prices in Kentucky dropped 12¢ over the last month, matching the one-month decline nationally. In states such as Idaho, gas prices are 30¢ less than a year ago. (MORE: Plug-In Price War: $6,000 Price Cuts on Nissan Leaf, Toyota Prius EV) Few drivers are overjoyed with gas prices lately, however. Some don’t even seem to believe that they are paying less than a year ago. This week, the price-tracking service GasBuddy posted on Facebook a current list of gas prices in 166 U.S. cities, next to a list of prices from a year ago—and in every single case, prices were cheaper in 2013. Several commenters disputed the data, swearing that they were paying less 12 months ago. Many others griped that the prices are “still way too high,” regardless of whether or not there was a time when they were higher. The feeling is that even if prices are cheaper than last year, that doesn’t mean they’re cheap. What’s more, powerful players in the gasoline business say that even though gas prices have declined recently, the prices at the pump should be much cheaper. Last week, the DesMoines Register reported that oil company advocates are blaming the ethanol industry for unnecessarily high gas prices. Meanwhile, supporters of ethanol and other renewable fuels are putting the blame on Big Oil: Renewable energy people want an investigation of oil company pricing. The oil
Are Electric-Car Enthusiasts a Little Too Enthusiastic?
Some electric vehicle owners have over-the-top praise for their cars’ performance and practicality. Does that mean the vast majority of drivers on the road are stupid for not being EV early adopters? Check out this article in the Washington Post, written by a columnist who says “I can’t drive my Mercedes-Benz any more” after owning an electric-powered $60,000 Tesla Model S for a month. Here’s a snippet of the breathless review, appropriately titled “Confessions of a Tesla Fanboy”: When you step on the pedal in the Model S you skip a few heartbeats. The car literally seems to fly. It is frighteningly quiet and picks up acceleration like a spaceship shifting into warp speed. I’ve raced Formula Fords at Skip Barber Racing School and have driven Porches and Ferraris owned by my friends. They feel like super-charged lawn mowers when compared with the Tesla. (MORE: It’s Not About the Range: How the Tesla-NY Times Controversy Misses the Point About Electric Cars) A San Francisco Chronicle story quotes an EV enthusiast named Forrest North, who just so happens to run an app that helps locate EV charging stations, saying, “Plug-in vehicles have crossed over the point of being an economic no-brainer in the last few months.” North had this to say about owning a Nissan Leaf for two years, and driving it about 1,000 miles per month: “I have not taken it in for a single service in those two years,” he said. “You can fit the entire cost of ownership, lease, service and fuel into the fuel bill of any other normal car.” Now, if you swallow everything that EV owners like these say, it seems almost idiotic to still be driving around in a vehicle powered by a traditional internal-combustion engine and dropping money at gas stations on a regular basis. So, are we all just dumb for not hopping aboard the Plug-in Express? Of course not. The truth is that there are legitimate reasons to be skeptical about the costs and practicality of EV ownership. It also seems
February Gas-Price Spike Becoming an Annual Tradition?
Demand for gasoline usually dips during the cold, sleepy month of February. Prices at the pump tend to decrease or remain flat as well. Not last February, though, when gas prices spiked during a run-up to peak prices in the spring. And this February, prices are rising even quicker than last year. Twelve months ago, drivers were puzzled — and annoyed — by the sharp increase in gas prices, which was doubly frustrating because February has traditionally been a month when prices at the pump fall. Around mid-February 2012, the national average for a gallon was $3.52, which was 40¢ higher than it was at the same point in 2011. Drivers grumbled that they were paying the highest ever prices for such an early time of the year and that prices were rising roughly 1¢ per day in many states. Lately, according to the AAA Fuel Gauge Report, the national average is $3.75 per gallon. Prices have risen every day for more than a month, in what seems to have become a new February tradition that’s unwelcomed by drivers. (MORE: What Would Make an All-Electric Car Appeal to the Masses?) While an early-year gas-price hike isn’t entirely shocking given the events of last year, the pace of the rise is especially swift. In Chicago, the average price rose 40¢ over the past month and is now close to $4.10 per gallon. During the same one-month span, prices increased 60¢ in Michigan, according to Detroit News. In California, prices crept up 55¢ over a 25-day span, hitting all-time highs for this time of year. The Orlando Sentinel reported that a gallon of gas in central Florida costs 16¢ more than it did just one week ago, and 41¢ more than three weeks ago. The reaction of analysts is that these annual price increases should more or less be expected nowadays. Per the Orlando Sentinel: ‘So far, market trends and price fluctuations at the pump have been similar to 2011 and 2012, leading analysts to believe prices will peak in April before they retreat,’