Gas prices in CT down from record highs as new year dawns
Motorists in Connecticut will ring in the new year with prices at the pump significantly below the painful record highs of this past summer and the prospect of not having to dig quite as deeply into their wallets in 2023.
“If you were to look at the amount you paid for gasoline at the start of the year through the end of the year, 2022 was a doozy,” said Peter De Hann, head of petroleum analysis at GasBuddy, an app that tracks fuel prices. “What’s coming up in 2023 is your annual fuel bill will likely be lower than it was in 2022.”
De Hann said he’s not declaring the roller coaster ride of gas prices to be over. There will still be ups and downs, especially seasonal increases as the summer travel season kicks into high gear. But De Hann doesn’t expect the wild swings of 2022 when inflation surged, energy markets were rattled by Russia’s invasion of Ukraine and the Federal Reserve bore down on interest rate increases to cool inflation.
Experts say gas prices are now easing for a combination of reasons. They include more oil refineries — both in the U.S. and abroad — coming online, fears of a recession, releases of oil reserves by the Biden administration and a more muted disruption in the supply of Russian oil than expected because of the war in Ukraine and economic sanctions imposed by the West.
Connecticut motorists also have benefited from a gas tax holiday of 25 cents a gallon. The state will begin phasing in the tax as of Jan. 1, with the tax fully restored by May 1.
Across the state, a gallon of regular unleaded gas averaged $3.14 on Wednesday, according to AAA, down 37% compared with a record average high of $4.98 recorded on June 14.
The Hartford area saw an even lower average of $3.06 a gallon, a decline of 38% compared with a record high of $4.96, also on June 14.
‘Money in my pocket’
All this comes as a relief to Sandy Valentine, who was recently pumping regular unleaded into her Chevrolet Silverado at a Gulf station in Manchester. The price per gallon was $2.81 for cash and $2.91 for credit.
Valentine said at the peak of price increases, it would easily take $90 to fill up the pickup. Last week, while the tank is filling, Valentine estimates it will be closer to $75.
Valentine, who lives in Manchester, said she coped with the high gas prices by not going “anywhere but work for the most part.”
The gas nozzle clicks off, signaling the tank is full, and the pump reads 21 gallons.
“Oh, this is pretty good,” Valentine said. “This was almost empty, and it’s about $62.”
In its recent annual gas price outlook report, GasBuddy forecast the national average for a gallon of regular unleaded to come in at $3.42 for 2023.
GasBuddy doesn’t make forecasts for individual states, but De Hann said Connecticut is historically at or slightly above the national average. That’s because of the state’s gas tax and the scarcity of refineries in the Northeast, experts say.
Nationally, the projected yearly household spending on gasoline could drop a projected 10% to $2,471 in 2023, from $2,748 in 2022, a difference of $277, GasBuddy estimated.
“That’s money in my pocket,” Marika Esteves-Smith, a Manchester resident, said, while filling her tank at the same Gulf station. “Food is still up, and we have to drive around.”
But projecting gasoline prices is tricky because there are factors like Russia’s invasion of Ukraine in 2022 that weren’t even on the radar and ended up having a major influence.
De Hann said there is a possibility of regular unleaded reaching $4 a gallon again this year. But other experts say they don’t think that will happen given increased gasoline.
A couple of wild cards
Tom Kloza, global head of energy analysis at the Oil Price Information Service, a gas and oil price-reporting agency in Rockville, Md., said he expects a much calmer year but there could be a couple of wild cards, especially for the Northeast early in 2023.
A major refinery in New Jersey that supplies the Northeast will shut down for two months of maintenance in February and March, Kloza said.
“When it goes down for maintenance, it can lead to price spikes,” Kloza said. “And that’s a possibility towards the end of the first quarter. That refinery is very crucial for the entire Northeast.”
Another date to watch, Kloza said, is Feb. 5. That’s when the European Union’s boycott of Russian refined products, including gasoline, goes into effect and could affect the Northeast, in particular, and comes at the same time as the refinery shutdown in New Jersey.
“Typically, we’ll get some gasoline from Europe and we might even get some diesel from Europe and they are going to be weaning themselves almost all Russian” refined products,” Kloza said. “So that is a date to put on the calendar.”
Gasoline prices can be affected by factors beyond supply — or even worries about supply — as is evidenced by the wide range of pricing throughout Connecticut.
Tracy E. Noble, a AAA spokeswoman, said there can be other factors at play, including distance from entrances and exits to highways. A gas station near a highway could sell gas at a higher price with travelers willing to pay the price for the convenience. But Noble said similarly located gas stations could price gas lower because of the “sheer volume” of customers.
The intensity of competition in the surrounding area also can influence pricing, Noble said.
A gas station that is also paired with a convenience store could allow an operator to offer lower gas prices.
“They have the ability to offset costs with the purchase of food and convenience items,” Noble said. “Fuel is not their only source of income. So a lot of factors can come into play.”