A few days before the year ended, White House chief of staff Ron Klain boasted that “more than half the gas pumps in the USA are at $2.92 or lower.” As I’ve mentioned earlier, this White House likes to change its measuring stick for gas prices from mean to median or mode and back, depending on whichever figure makes it appear that gas prices are lowest. The just-below-three-dollars prices in most of the South and Midwest is cold comfort for drivers in Pennsylvania (averaging $3.63 today) or Nevada ($3.97 today) or California (averaging $4.42 today).
As 2022 came to an end, the national average retail price of a gallon of gasoline was $3.09, according to the U.S. Energy Information Association. That price looks pretty good compared to the $5 per gallon national average of midsummer and is even slightly lower than it was the same week in 2021, when the price was $3.27.
But by historical standards, paying roughly $3 per gallon around Christmastime is really high.
In the same week in 2020, the average price was $2.24, which we could attribute to lower demand because of the Covid-19 pandemic.
- In the same week in 2019, the average price was $2.53.
- In the same week in 2018, the average price was $2.32.
- In the same week in 2017, the average price was $2.47.
- In the same week in 2016, the average price was $2.30.
- In the same week in 2015, the average price was $2.03!
- In the same week in 2014, the average price was $2.40.
In other words, between Christmas and New Year’s, most Americans are used to paying somewhere between $2 and $2.50 per gallon. Also note that consumer demand for gasoline was particularly low as 2022 came to a close.
In the Wall Street Journal, Texas Tech University economics professor Timothy Fitzgerald echoed the point I kept trying to make all last year. The U.S. doesn’t have sufficient refinery capacity to get refined gasoline to consumers at the price they’re used to paying for it. Think of the current refineries as a funnel. It doesn’t matter how much oil you release from the Strategic Petroleum Reserve or drill if you don’t expand the ability to turn that oil into useable fuel. And Fitzgerald points out that we’re going backwards:
What capacity remains is contracting. The Tesoro refinery in the Bay Area city of Martinez has closed in anticipation of conversion to a renewable-fuels plant, taking more than 160,000 barrels per day out of the supply chain. The renewable-fuels plant will replace less than a third of that capacity.
A similar fate befell the country’s second-newest refinery, in Dickinson, N.D., as firms struggle to take advantage of government incentives for ethanol. America’s remaining refineries are having to run harder to make up the difference.
Blame bad weather for the latest slowdown at certain oil refineries along the Gulf Coast.
U.S. oil refiners on Tuesday were working feverishly to resume operations at a dozen facilities knocked offline by a holiday deep freeze, a recovery that in some cases will stretch into January.
An Arctic blast sent temperatures well below freezing and led to power, instrumentation and steam losses at facilities along the U.S. Gulf Coast. The affected plants process about 3.58 million barrels of oil per day, delivering about 20 percent of U.S. motor fuels.
Sure, gas prices are lower than they were in the summer — fewer people are driving in the winter months, and bad weather keeps people at home. This lowers consumer demand for oil products such as gasoline but increase them for others, such as home-heating oil — which just hit its highest price in 30 years.
Curiously, Ron Klain hasn’t tweeted about heating-oil prices at all.