Amarrie McCall fills up her tank on a cold winter day. Gas prices are the highest at the start of the year since 2014. (Brett Luke | The Journal Gazette)
Thursday, January 04, 2018 1:00 am
Cold not only pain at pump
2018 gas outlook expects highest prices since 2014
ASHLEY SLOBODA | The Journal Gazette
States with largest rise in per-gallon price of regular unleaded over 2017:
1. Alaska, 39 cents, ended at $3.08
2. Montana, 35 cents, $2.58
3. California, 34 cents, $3.11
4. Oregon, 30 cents, $2.79
5. Hawaii, 27 cents, $3.28
6. Washington, 24 cents, $2.91
7. Wyoming, 24 cents, $2.43
8. Indiana, 23 cents, $2.61
9. Nevada, 22 cents, $2.65
10. Utah, 22 cents, $2.40
Indiana is starting the new year above average – and it's not good news for drivers' pocketbooks.
On average, AAA reported, Hoosiers on Wednesday paid $2.59 per gallon of gas, or a dime above the national average of $2.49 – the most expensive gas prices at the start of a new year since 2014, when prices were more than $3.
The auto club attributed increased prices to holiday travel, but an online gas price tracking site predicts motorists will pay more at the pump this year.
In its 2018 Fuel Price Outlook released Wednesday, GasBuddy forecasts a 19 cent increase in the yearly national average. That estimate – $2.57 per gallon – is the highest since 2014.
For an average household, that could mean a gasoline bill of $1,898, compared with $1,765 in 2017, GasBuddy said.
In Indiana, lawmakers last year raised fuel taxes by 10 cents in an effort to increase road funding for state and local projects. Fiscal analysts have predicted the increase, which took effect July 1, will cost an average Hoosier motorist about $48 per year.
Patrick DeHaan, head of petroleum analysis at GasBuddy, said its forecast considered various factors.
“Many will be quick to ask why we're expecting higher prices. Ultimately, OPEC bears much of the responsibility for cutting oil production, leading oil inventories to begin 2018 nearly 50 million barrels lower than a year ago,” DeHaan said in a statement.
“Yet, understanding many factors, including OPEC, fuel taxes, the economy and their impact on supply and demand is integral to providing a thorough and balanced outlook on gas prices for 2018.”
Although GasBuddy is confident in its forecast – its last two yearly predictions were off by 10 and 16 cents – an economics professor at IPFW said it's difficult to predict the increase because gas prices are volatile.
Nodir Adilov, who is also the economics chair, predicted an increase between 15 and 20 cents but recognized the price could go up much more.
Various factors, including seasonal trends and supply disruptions, could cause temporary price hikes, he said.
GasBuddy acknowledged unexpected disruptions could push the national average near $3, but it expects peaks below $3 per gallon for most of the country.
Increases will affect individual drivers differently, but the economy overall can absorb such fluctuations of 10 or 20 cents, Adilov said, noting that such changes might hurt more during recessions. Greater increases, such as by $1 or more, would also have a negative effect, he said.
For the moment, at least, Allen County residents might take comfort knowing its gas prices are among the lowest in northeast Indiana, according to AAA's data Wednesday.
Allen County's average gas price was about $2.60, compared with prices in neighboring counties of $2.74 in DeKalb, $2.73 in Whitley, $2.72 in Wells, $2.69 in Huntington and $2.63 in Noble.