Many drivers are giving more at the pump than a year ago but they still have reason to be thankful. Prices in many parts of the country have fallen recently, and AAA says gas prices could end the year lower than where they started.
The national average Wednesday was $3.43, down 44 cents from mid-September although still 8 cents higher than a year earlier. Gas started the year at $3.28 a gallon. AAA says it should be between $3.10 and $3.30 when 2012 ends.
Still, because the price was so high for so much of the year, Americans are likely to spend a record amount for gas in 2012. Tom Kloza of the Oil Price Information Service estimates that Americans will spend about $483 billion on fuel this year, eclipsing last year's record of $471 billion. And that's even as Americans use less gas by taking shorter trips or driving more fuel efficient cars.
The Energy Department estimates that gas prices will average $3.64 a gallon this year after averaging a record $3.53 a gallon in 2011.
A number of things affect the price of gasoline. It starts with the price of oil, which can be impacted by everything from the strength, or weakness, of the global economy to tensions in the Middle East. That oil is turned into gasoline and other products at refineries. The U.S. has about half the number of refineries it did 30 years ago. When one goes down due to a fire or unplanned maintenance, it can lead to a shortage of gasoline, which sends prices higher.
All of these factors have come into play in a big way this year. That's why prices haven't just been high — they've been on a roller coaster. There have been four separate swings of at least 40 cents — two higher and two lower.
The wild swings have been even more notable in individual states. Here's a look at how volatility has contributed to wide swings in certain states over the past year:
NEW YORK/NEW JERSERY:
The long lines are gone but motorists in New York and New Jersey are still paying as much as 30 cents more per gallon than they did a year ago. Even before Superstorm Sandy, drivers in the both states — and elsewhere in the Northeast — were paying higher prices because refinery issues caused temporary supply shortages in late summer. Just as supplies were being replenished, Sandy hit. Refineries were shut down, oil imports were delayed and many gas stations were without power. Drivers who didn't want to risk running out of gas waited on lines for hours to fill up. New Jersey and then New York imposed gas rationing. Prices rose more than 10 cents in New York City, Long Island and certain parts of New Jersey, according to AAA.
Wednesday average price: $3.92/gal
Versus year ago: Up 27 cents
Wednesday's average price: $3.55
Versus year ago: Up 30 cents
Gas prices have dropped about 70 cents after jumping above $4 a gallon in May. Most drivers are now getting a discount of about 20 cents compared with last year.
The reason: West Coast refineries, which had been closed for fires or other maintenance, are operating again. That includes BP's Cherry Point refinery in Blaine, Wash. Washington also is benefiting from cheaper crude delivered by rail from the Bakken shale region in North Dakota, where oil production is booming. Bakken crude is on average about $4 cheaper than oil at the Clearbrook, Minn., pricing hub, says Tom Kloza, chief oil analyst at Oil Price Information Service.
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