2012 will be record year for gas prices

David Albers/Staff 
 — Gas prices push into the 4-dollar range at the Chevron gas station at 8901 U.S. 41 North on Wednesday, March 21, 2012, in North Naples.

Photo by DAVID ALBERS, Naples Daily News // Buy this photo

David Albers/Staff — Gas prices push into the 4-dollar range at the Chevron gas station at 8901 U.S. 41 North on Wednesday, March 21, 2012, in North Naples.

Here’s the thing about gas prices: They’re high.

This year, they were so high, they set a record — Americans will spend more on gasoline in 2012 than in any other year. The yearly national average price will be around

$3.63 per gallon, according to GasBuddy.com.

It breaks a record that held the top spot for only one year — 2011 had an average price of $3.51, or

72.6 cents per gallon higher than the bargain-

basement days of 2010.

Of course, there is this statistical caveat: Gas prices theoretically could plummet so severely in these last few weeks that the record-setting average is no longer record-setting. But prices would have to fall to $2.35 per gallon and stay there — and if that happens, chances are society has bigger problems than gas prices.

The high prices have driven more cars from the road and had a ripple effect on the convenience stores that use the lure of gasoline to sell chips and soft drinks.

In the most recent traffic volume trends report, the U.S. Department of Transportation noted year-over-year travel in September fell by 1.5 percent — or a loss of about 3.6 billion miles.

Fewer miles driven means fewer trips to the gas station, which is believed by experts to be a major factor behind a noticeable drop in

convenience store traffic. In the third quarter, consumer traffic through convenience stores fell 2.1 percent, according to NPD Group, a market research firm.

Although consumers made fewer trips to the convenience store, they spent more when they were there — the average amount spent in a convenience store trip increased 2.5 percent during those same three months, and it wasn’t the nation’s run on Twinkies that was to blame.

“The $3 mark is where we see behavioral changes,” said David Portalatin, a convenience store analyst with the NPD Group. “We change our commuting patterns, and we may normalize around that new price point, but I’m not sure we’re there yet.”

Stores that have attractions beyond gasoline — such as a made-to-order sandwich bar, or a Redbox video rental machine — have somewhat inoculated themselves from the drop in business, Portalatin said.

On a national scale, two events from the past year were cited as major causes of the record-setting average: a refinery fire in California and Hurricane Sandy’s disruption of production along the East Coast.

California’s fire sent prices rising dramatically in that state, especially since the state’s stricter environmental standards for fuel prevent motorists from using gas acceptable in other states. When the fire caused supplies to drop, some parts of California consistently registered gasoline at $4.70 per gallon.

The damage wrought by Hurricane Sandy in early November was seen in the days immediately following the East Coast storm.

In the week before the hurricane, refineries along the East Coast were operating at 81 percent, according to the Energy Department.

One week later: 58.5 percent.

The East Coast refineries have started to stabilize since then, with the most recent weekly figures measuring the output at 77.1 percent.

Between now and Christmas, Gregg Laskoski, senior petroleum analyst at GasBuddy.com, expects prices to move incrementally lower — the end of the fourth quarter is typically a tempered one at the pump, he said, and output should continue to increase as more refineries recover from the storm’s losses.

But consumers should expect prices to rise after the New Year’s Eve ball drops, he said.

The price increases should become particularly noticeable in mid-February and through March and April as conversions to different seasonal blends always force a price increase.

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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