U.S. Gasoline at Pump Averaged Record High in 2012, AAA Says
Motorists in the U.S. paid record high prices for gasoline in 2012, as severe weather and political tensions drove up the cost of fuel.
The national average price of gasoline in 2012 was $3.60 a gallon, nine cents more than the previous annual record set last year, said Heathrow, Florida-based AAA, the nation’s largest motoring group.
Prices touched $3.94 a gallon on April 5 and 6 after crude oil rallied as the U.S. and European nations imposed an embargo on Iranian oil exports to pressure the Persian Gulf nation over its nuclear program. Prices sank as low as $3.22 a gallon on Dec. 20 amid lower demand and higher supply in winter, when motor fuel faces looser emissions regulations.
“Factors as volatile as major hurricanes, refinery outages and tension in the Middle East resulted in significant frustration for people filling up their cars,” Avery Ash, a spokesman for AAA, said in an e-mailed statement.
Gasoline prices will probably drop next year than in 2012 because of increased domestic crude production and lower motor- fuel demand, Ash said.
The U.S. produced 6.98 million barrels of oil a day in the week ended Dec. 21, the most since March 1993, according to Energy Department data. Drillers in states like North Dakota and Texas have spurred the output growth with increased use of methods such as directional drilling and hydraulic fracturing.
The four-week average for gasoline demand the week ended Dec. 21 was 3.3 percent below a year earlier, MasterCard Inc. (MA) said last week. Year-to-date fuel consumption is 3.6 percent below the same period in 2011. The information is based on credit-card swipes and cash and check payments at about 140,000 U.S. gasoline stations.
If U.S. legislators fail to reach a budget deal, the economy could fall into a recession, further depressing price forecasts for next year, Ash said.
Senate Majority Leader Harry Reid said negotiators could reach a U.S. budget deal today that would protect all but top earners from a tax increase at midnight.
The biggest sticking point in the final hours before the deadline is how to cancel or delay more than $600 billion in automatic spending cuts to defense and domestic programs, said two congressional aides familiar with the talks. Lawmakers also were narrowing the annual income level at which tax rates would increase in 2013 to between $400,000 and $500,000.
“What happens with gas prices this year will be impacted by decisions in Washington this month,” Ash said. “Yet no matter what happens in Congress, AAA is optimistic that gas prices will be less expensive than in 2012.”
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