Published 1:45 pm Wednesday, May 10, 2023
Gasoline will be about 20% cheaper than last summer’s record-setting prices, the U.S. Energy Information Administration predicts.
Gasoline is expected to average $3.40 a gallon nationally and $4.30 a gallon on the West Coast between May and September, according to the EIA’s short-term energy outlook.
The agency did not project diesel prices. Diesel consistently costs more than gasoline because of high demand, and higher federal taxes and production and distribution costs, according to the EIA.
Gasoline peaked last summer nationally at $5.06 and on the West Coast at $5.67. Diesel topped out at $5.81 nationally and $6.48 on the West Coast.
EIA attributed the reduced fuel prices to lower crude oil prices and lower refining margins for gasoline.
In the past 12 months, gasoline and diesel prices have declined across the U.S. The decline has not been as sharp in Washington as other states. Washington ranks last among states where gasoline and diesel prices have fallen.
Washington diesel prices are down 74.3 cents a gallon from a year ago, AAA reported. Arizona’s diesel prices have dropped 86.5 cents. Declines in 47 other states range from 99.5 cents to $2.36. The price of diesel in Hawaii increased by less than a penny.
Washington gas prices have dropped 28.5 cents a gallon. Washington and Arizona are the only states where gasoline prices have not not fallen by at least 52 cents since May 10, 2022.
An oil refinery in El Paso, Texas, has been closed for maintenance and has impacted fuel prices in Arizona, said Andrew Gross, who writes AAA’s gas and oil market report.
Washington typically has high fuel prices compared to other states because it’s far from oil sources and has a high demand for gasoline and diesel, he said.
Gross said he did not know whether Washington’s new cap-and-trade law is influencing fuel prices, or whether Washington will continue to trail the rest of the country if prices continue dropping.
“If people say they know what the price of gas is going to be, they will always be wrong,” he said.
Washington’s diesel prices were the third-highest in the U.S. A year ago, Washington had the 15th highest diesel prices.
Washington’s gasoline prices were the fourth-highest, the same ranking among states as one year ago.
Western States Petroleum Association spokesman Kevin Slagle said Washington sometimes lags behind other states as fuel prices change.
“I don’t think what we’re seeing is unusual,” he said. “Certainly, cap-and-trade could be part of it, but it’s hard to pinpoint.”
Washington enacted cap-and-trade Jan. 1, putting a fee on emissions from fossil fuels through quarterly auctions of carbon-emission allowances. The first auction, in February, raised nearly $300 million for state government and set a fee of $48.50 per ton of carbon emissions.
At that price, cap-and-trade could be expected to add 38.8 cents a gallon to gasoline and 48.5 cents a gallon to diesel, according to a formula cited by the California Air Resources Board, though it’s unclear whether the costs are immediately affecting pump prices.
Cap-and-trade will impact other energy prices. Natural gas companies have indicated in public reports they expect to incur costs complying with cap-and-trade and will raise rates.
