In 2015 gas was cheaper than 2014, will be cheaper in 2016

According to the latest data from AAA, Americans paid less at the pumps this year than they have since 2009. And gasoline could get even cheaper next year.

AAA reports that the average price paid at filling stations across the United States was $2.40 per gallon. That's an average of 94 cents less per gallon than American motorists paid last year. The current national average is just $2 per gallon, which is the lowest average price recorded on New Year's Eve since 2008, and the national average for December was barely more at $2.01 – the lowest it's been since March 2009.

Furthermore, 71 percent of stations across the US are selling gas for less than $2 per gallon, which can be found at at least one station in 47 of the states in the Union. If you looked hard hard enough, you might have even found one of the 16,000+ stations selling gas for under $1.75 (like the Mobil station pictured above in Livonia, MI). Okay, maybe not if you live in California, which for the first time in history had the highest average prices in the nation. But prices were better in the Southeast – especially in South Carolina, but recorded the lowest average prices in the country for the fourth year running.

What that all boils down to is that Americans saved about $115 billion on gasoline this past year compared to the year before. That's more than $550 in every licensed driver's pocket, on average. And the outlook for gas prices for the year ahead looks even better: AAA projects that the average price Americans will pay throughout 2016 will land between $2.25 and $2.45 – or a good ten cents per gallon less (give or take) than the already low prices paid this year.

AAA Year-End Gas Price Report
Gas Prices This Year Averaged About 94 Cents per Gallon Less than 2014

· The national average price of gas in 2015 was $2.40 per gallon, which was the second cheapest annual average of the past ten years. Only 2009 was lower during that time. This year's annual average was about 94 cents per gallon less than 2014.

· AAA estimates that Americans saved more than $115 billion on gasoline this year compared to 2014, which was an average of more than $550 per licensed driver.

· The annual average price of gas in recent years was $3.34 (2014), $3.49 (2013), $3.60 (2012), $3.51 (2011), $2.78 (2010) and $2.35 (2009).

· The most expensive daily national average of the year was $2.804 per gallon on June 15, while the lowest was $1.998 per gallon on December 21. Average gas prices dropped below $2 on December 21 for the first time since March 25, 2009.

· The average price of diesel in 2015 was $2.71 per gallon, which was the lowest average for the fuel since 2009. Last year diesel averaged $3.81 per gallon.

· The average price of premium gasoline in 2015 was $2.84 per gallon, which was about 87 cents per gallon less than the previous year. The average difference between regular and premium was 44 cents per gallon in 2015, which was the largest difference on record.

· Fuel prices remained relatively low throughout the year due to a worldwide glut in crude oil. There was more than enough oil to meet demand around the world, and that allowed oil prices to drop to the lowest levels since 2009.

Average Gas Prices Close Out the Year at $2 per Gallon

· Today's national average price of gas is $2 per gallon, which is the lowest average for New Year's Eve since 2008. Today's average is about 26 cents per gallon less than a year ago.

· The national average price of gas for December was $2.01 per gallon, which was the lowest monthly average since March 2009.

· Gas prices are lower than $2 per gallon in most parts of the country. About 71 percent of U.S. stations are selling gas for less than $2 per gallon today, and drivers can find at least one station selling gas for less than $2 in 47 states.

· The cheapest one percent of stations are selling gas for an average of $1.56 per gallon, and more than 16,000 stations across the country are selling gas for less than $1.75 per gallon.

· The five states with the lowest average prices today include: Missouri ($1.72), Oklahoma ($1.75), South Carolina ($1.75), Arkansas ($1.75) and Tennessee ($1.76).

· The five states with the highest prices today include: California ($2.85), Hawaii ($2.69), Nevada ($2.51), Washington ($2.47) and Alaska ($2.47).

Californians Paid Highest Gas Prices in 2015 for First Time on Record

· California had the most expensive annual average of any state in 2015 for the first time on record. California's annual average was $3.16 per gallon. California's refineries experienced a significant number of problems throughout the year, which disrupted regional production and kept gas prices higher than expected.

· Gas prices in Southern California were even higher than the rest of the state. For example, the annual average in Los Angeles was $3.29 per gallon in 2015.

· The next most expensive states for gasoline included Hawaii ($3.10), Alaska ($2.97), Nevada ($2.86), Washington ($2.73) and Oregon ($2.68).

· Despite paying relatively high prices throughout the year, California's average was still 59 cents per gallon less than 2014, due to the relatively low cost of crude oil.

· Since 2000, Hawaii has typically been the most expensive state for gasoline, and its average was the highest for 13 out of the previous 16 years. Alaska's average was highest in 2008 and 2009.

Drivers in Southeastern United States Paid the Lowest Gas Prices in 2015

· South Carolina's annual average price of gas was the cheapest in the country for the fourth year in a row at $2.10 per gallon, and this also was the lowest annual average for the state since 2004. Drivers in South Carolina paid about $1 less during the year than in 2014.

· The next lowest gas prices were also in the Southeastern U.S. in Mississippi ($2.14), Alabama ($2.15), Tennessee ($2.16) and Louisiana ($2.18).

· Drivers in many Southeastern states benefit from relatively low gasoline taxes and access to abundant refinery production along the U.S. Gulf Coast.

Drivers May Pay Even Less for Gasoline in 2016

· Gas prices are likely to remain relatively low in 2016. AAA estimates the annual average price of gas in 2016 is likely to end up between $2.25 and $2.45 per gallon, which would be cheaper or at least comparable to this year's average of $2.40 per gallon.

· Based on typical seasonal trends, the national average price of gas could remain relatively flat or drop another 10 cents per gallon over the next few weeks. By late winter, the national average could rise 50 cents per gallon or more as refineries conduct seasonal maintenance in advance of the busy summer driving season. Despite the likelihood of higher prices by spring, AAA does not expect the national average price of gas to rise above $3 per gallon in 2016.

· Regional gas prices will continue to vary dramatically around the country in 2016. Problems with local refinery production, especially during spring maintenance and the busy summer driving season, could temporarily send regional gas prices much higher than the national average. Just as in 2015, it is possible that some areas could see prices higher than $3 per gallon.

· There is significant uncertainty over the potential cost of crude oil in 2016, though most analysts expect the market will remain oversupplied throughout the year. There currently is a glut of crude oil around the world that has grown faster than demand, and that situation is unlikely to change significantly as Iranian oil enters the marketplace and because the global economy is growing at a relatively weak pace.

· It is possible that gas prices could rise higher than expected if there are significant changes in the oil markets. Some analysts have predicted that low prices will significantly limit oil production in the United States and in other higher-cost production countries, which could allow supply and demand to rebalance by the end of 2016. Alternatively, it also is possible that political events and conflict could unexpectedly disrupt oil production. Either of these possibilities could lead to higher than predicted oil and gasoline prices for Americans.

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• News Source: AAA
• Image Credit: Joshua Lott/Getty

An Increase In Gas Prices Does Not Mean An Increase In Electric Vehicle Sales

The LA Times recently reported on a new publication by Experian Automotive indicating that, contrary to what we might like to believe, a $1 increase in gasoline prices here in the U.S. would not boost sales in hybrids and electric vehicles (EVs). However, the Experian group’s report claims that higher fuel prices would increase sales of new, small, gas-powered cars.

Experian’s analysis is based on what the Schaumburg, IL based group called “an average month” of 1 million new car sales. Within that month, a $1 per gallon increase in gas prices would increase sales in the small car economy segment by 0.7% (close to 7,000 vehicles). In the same month, hybrid sales would grow by just 0.2% (about 1,000 cars), while EV sales would grow by just 0.1%.

Experian explains that the reason for the lack of a sales spike in the hybrid and EV market is that, even as gas prices increase, new small gasoline powered cars simply cost less than current hybrids and EVs. On the surface, then, it seems that the American consumer is motivated more by sticker price than any potential long-term savings.

Before jumping to that conclusion, however, it should be noted that most EVs and hybrids are more expensive than their ICE counterparts, and that gas-powered cars have been making huge strides in MPG in recent years. Additionally, the potential fuel savings made by switching from a new gas powered vehicle to an EV or hybrid has been brought into question in the past, and easy access to public charging stations is still a major issue facing electric car owners across the U.S. These factors, along with an American economy that is still not “back up to speed” and the populations’ compliance with the roller coaster ride of gas prices, means that consumers may just feel more comfortable going with what they know and understand – conventional gasoline powered vehicles.

Source:  Experian

Gas Prices on the Rise, Here's Why

Over the past week or so, we’ve seen the average price of gasoline hit $3.60 per gallon of regular, with some areas of the country -- like California -- reaching a heady $4 a gallon.

But while the Syrian uprising and political tensions between Iran and the West over its nuclear program are playing a small part in increasing the price you pay at the pump, energy specialists say the biggest culprit lies closer to home.

In short, the U.S. isn’t refining as much gasoline as it once was.

During Wednesday’s All Things Considered on NPR, Fadel Gheit, senior energy analyst at investment firm Oppenheimer and Co., explained that outdated and unprofitable oil refineries had been closed down in recent years.

Declining Refineries

“The supply of gasoline has been declining,” he explained. “We have 700,000 barrels of refining capacity [that were shut down] in the last three months. That is almost 5 percent of U.S. gasoline production...now offline.”

Most of the recently closed refineries -- more than energy analyst Phil Verleger has seen in his 39-year career -- have been closed down as a direct consequence of the type of oil now common on the market.

High Sulfur Crude

Traditionally, so-called “sweet” low-sulfur crude was refined into gasoline, but as supplies have dwindled the cost of sweet crude has risen, more refineries have started to process high-sulfur crude.

But high-sulfur crude, while cheaper to buy, requires more processing in order to remove the higher levels of sulfur. In turn, that means older refineries be retrofitted with expensive equipment designed to deal with the higher levels of sulfur.

The U.S. isn’t alone in a reduction of oil refineries either. According to Verlerger, a large oil refinery in Europe has also had a big impact on U.S. gasoline supplies.

Offshore Oil Rig

Exports Impact Domestic Sales

With a drop in domestic gasoline production, you may expect the U.S. is importing more oil than normal, accounting for a rise in gas prices.

But the truth is the exact opposite. Over recent years, the amount of foreign gasoline imported into the U.S. has dramatically dropped, while the export of gasoline has increased.

And with increased gasoline exports, there’s even less gasoline for domestic customers.

Driving A High Gas-Mileage Future?

At the moment, gas prices are having a negative effect on the bank balances of Americans nationwide.

But if it continues, the rise in gas prices could help the U.S. auto industry, which has focused a lot of attention in the past few years on producing high gas mileage cars, hybrids and plug-in cars.

Source: Green Car Reports

California gasoline consumption down 1.8%, diesel up 4.8% in October 2011; gasoline consumption continues downward trend

Gasoline consumption in California declined 1.8% in October 2011 while diesel fuel consumption increased 4.8% according to a report released today by California State Board of Equalization (BOE).

High gas prices appear to be directly affecting fuel consumption in California. We are seeing a trend of Californians consuming less gasoline in the last eight months of 2011. We’ll see what coming months show as California begins to turn the corner and shows signs of economic growth.

—BOE Chairman Jerome E. Horton

California used 1.23 billion gallons of gasoline in October 2011 which is a 1.8% decline from the previous year when 1.26 gallons were used. In California, the average price of gasoline rose 74 cents to $3.89 per gallon in October 2011, a 23% increase compared to $ 3.15 per gallon in October 2010. Nationally, the average price of fuel jumped 66 cents to $3.51 in October 2011, a 23% increase over the October 2010 price per gallon of $2.85.

Diesel fuel consumption in California increased 10.3 million gallons in October to a total of 226 million gallons, which is a 4.8% increase compared to the previous year when 216 million gallons were consumed. The average price of diesel in California rose 85 cents to $4.06 per gallon in October 2011 compared to $3.21 per gallon in October 2010. Nationally, the average price of diesel rose 75 cents to $3.80 per gallon which is a 25% increase compared to $3.05 per gallon in October 2010.

California gasoline and diesel fuel figures are net consumption that includes audit assessments, refunds, amended and late tax returns and the State Controller’s Office refunds. BOE is able to monitor gallons through tax receipts paid by fuel distributors in California. BOE updates the reports at the end of each month.

Source: Green Car Congress