Pumped Up: Gas Prices Soaring in '21

The steady rise in gas prices that began around the first of the year saw a small reprieve this week. AAA Texas has the statewide average down a penny to $2.63 per gallon, the first weekly decline since January. But that is still 81 cents more than a year ago at this time.

Texas gas prices are now at their highest level since 2018, and we're not even to the point where prices typically rise during the spring and summer. Oil market analyst Phil Flynn with the Price Futures Group blames several factors for the spike in pump prices, starting with a rise in crude oil prices back at the start of the year. "President Joe Biden and his anti-drilling policies---the drilling pause on public lands as well as the cancellation of the Keystone pipeline---is causing oil prices to go up," he says.

Another big factor is the onset of coronavirus vaccines. "It seems like when people get vaccinated, they want to drive their cars, and travel goes up," says Flynn. "So there's an expectation we're going to see increased demand...this comes at a time when U.S. refiners have cut back on production."

"That's going to be a problem this summer, if refiners can't keep up with the demand growth," he continues. "That means we're going to see sharply higher prices."

The bottom line is this week's small price drop is likely only a temporary relief for drivers. "This summer, we have the potential to see the largest gasoline prices we've seen in many, many years...I think the days of cheap gasoline prices are behind us," says Flynn. "Get ready for a summer of pain at the pump, because it's coming."

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