Gas prices were expected to increase 10-20 cents following the devastating winter storms in Texas and other southern states earlier this month. Experts are now predicting prices could get close to $3 a gallon this summer.
The prolonged below-freezing temperatures in Texas and the south stopped or slowed production at almost a dozen refineries, causing a sharp jump in gas prices immediately following the storm.
“Even after this event is over, it may take refineries days or even a week or two to fully return to service, and with gasoline demand likely to accelerate as we approach March and April, the price increases may not quickly fade,” said Patrick De Haan, head of petroleum analysis at GasBuddy earlier this month.
Experts who watch oil and gas prices say there are multiple reasons prices may continue climbing the next several months.
The storm, and resulting refinery slow down, happened at the same time that millions of Americans are receiving the COVID-19 vaccine and states are loosening pandemic restrictions, leading many people to get back on the road.
Also, prices have been slowly going up since last fall, when OPEC made production cutbacks. Refineries were dealing with those supply issues already, as well as worker shortages from COVID-19 restrictions and illnesses.
The price of crude oil has been going up as a result of the production cutbacks. The price for a barrel of crude oil is nearly more than it was at any point in 2020.
In addition, in the next few months, refineries will be switching over to producing their summer gasoline blends, which are cleaner, and more expensive.
“The era of low gasoline prices has ended and we are entering a new era of higher prices,” analyst Phil Flynn of the Price Futures Group told USA Today.
Flynn believes all of these factors will likely push the price for a gallon of gas to $3 by late spring/early summer.
DeHaan believes the national average will stay just under $3, and could reach $2.80 by Memorial Day weekend.
AAA thinks it's possible to reach $3 a gallon, but would require the price of crude oil to remain high while also seeing a spike in demand and large increase in the amount of driving Americans do this spring and summer.
The last time the national average for a gallon of gas was near $3 was in 2018.