WASHINGTON, D.C. – Gas prices are getting pumped up to their highest level in years.
The national average price of gasoline is now its priciest since July 2015, nearly 1,000 days, rising to $2.68 per gallon overnight according to GasBuddy.
The sudden surge after a week of relative calm at the pump can be blamed on oil prices surging to nearly $67 per barrel, the highest level since 2014, on fears of military action in Syria and trade conflict with China.
U.S. oil inventories also stand 20-percent lower than a year ago, the result of higher crude oil exports and Organization of the Petroleum Exporting Countries’ (OPEC) agreement to cut oil production, now in its 15th month. In addition, smaller issues driving prices up include refinery maintenance season, which is beginning to wrap up, and the switch-over to summer gasoline, which is also nearing completion.
Overall, the rally at the pump may be near a 7th inning stretch with the summer driving season just six weeks away.
“Many will be quick to ask why this trend is happening,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “Ultimately, OPEC bears much of the responsibility for cutting oil production in 2017, leaving U.S. oil inventories at far lower levels than a year ago.
“However, higher oil prices have also enticed U.S. producers to ramp up crude oil exports, effectively draining U.S. oil inventories at a higher pace than that oil is being replaced,” “In addition, recent rhetoric from the Trump Administration inflaming the situation in Syria and pushing a trade war with China is like pouring gasoline on a fire — they certainly put more upward pressure on prices.”
As of Thursday evening, local prices included $3.29 per gallon in Twisp and Winthrop, $3.19 in Pateros, $3.12 in Oroville, $3.07 in Chelan and $3.09 per gallon in Brewster, Bridgeport and Tonasket.
Prices were a bit cheaper in Kettle Falls, Omak and Grand Coulee at $2.99 per gallon.
The lowest price to purchase gas, according to GasBuddy, was Republic at $2.92 per gallon.
Prices are not only skyrocketing in the U.S.
Late last month Vancouver, B.C. became the home to North America’s most expensive gasoline, clocking in at $154.9 a litre at most gas stations according to GasBuddy, a new all-time record high surpassing the $1.543 per litre average set June 22, 2014.
“As a region, Vancouver’s gas price woes are due in no small part to a chronic fuel supply shortage and the continent’s 2nd highest fuel taxes, which combined, put drivers at a distinct disadvantage compared to other cities across Canada and the U.S.,” said Dan McTeague, petroleum analyst with GasBuddy.
The longer than expected maintenance shutdown of the Parkland refinery in Burnaby, which meets about 25 percent of Vancouver’s needs, has brought into sharp focus the city’s acute dependence on more expensive alternative fuel sources from Washington refineries as the existing Trans Mountain Pipeline is at capacity and can deliver no more fuel from Edmonton refineries.
With no immediate solutions a hand, it is now likely that Vancouver will see many occasions this summer where gas prices will break through the $1.60 a liter threshold and placing summer 2018 pump prices at their highest ever. The growing demand for fuel in one of Canada’s fastest developing areas has outpaced any increase in supply, creating a volatile environment for fuel prices with few near-term alternatives to provide relief. Since no refinery can be built overnight and Pacific Northwest refiners are already committed to supplying their own growing U.S. base of customers, Vancouver’s best hopes for long-term relief from fuel shortages rest with the fate of the approved twinning of the Kinder Morgan Trans Mountain Pipeline.
Approved in May 2016, the existing multipurpose pipeline with a capacity of 295,000 barrels a day would be complemented by a 600,000 barrel a day twin line devoted strictly to oil from Alberta’s oil sands. Once complete, the current line would have greater space and upgraded to allow delivery of more fuels from Edmonton’s massive refinery hub, directly to Vancouver.
“On a day like today when Edmonton wholesale prices are 23 cents a liter less than Vancouver’s, even with pipeline tolls, the savings to Vancouver’s drivers would be enormous and reduce a volatility that is costing Vancouver dearly.”
Compared to this time last year, drivers in the Lower mainland and Vancouver are paying over 22 cents a liter more than last year and with an average use of 45 liters per week, adding a possible $500 to the cost of transportation for Vancouver motorists.