- Gas prices in Florida dropped eight cents per gallon last week to reach a statewide average of $3.22 per gallon.
- However, rising U.S. oil prices suggest that the decline in gas prices may be short-lived, with AAA reporting a forty-cent-per-gallon increase in gas futures.
- The rise in U.S. oil costs is due to increased demand for gasoline and production cuts by major oil-producing nations such as Saudi Arabia and Russia, leading to a decrease in global oil supply.
- GasBuddy predicts that gas prices in Florida will peak in 2023 at an average of $4.25 to $4.65 per gallon in Miami, $4.15 to $4.55 in Orlando, and $4.10 to $4.45 in Tampa, with prices fluctuating seasonally due to refinery maintenance and the Clean Air Act.
Average gas prices in Florida dropped eight cents in the past week, with the statewide average cost per gallon sinking to $3.22. While the decrease may be welcome news for drivers in The Sunshine State, rising U.S. oil costs indicate that the respite may be short-lived
The price of a barrel of oil increased by four percent in the U.S. last week, reaching the highest cost-per-barrel point in upwards of two weeks at $79.68. The American Automobile Association (AAA) reported on Monday that gas futures — a contract obligating the buyer to purchase a specific quantity of natural gas at a future date and price — rose forty cents per gallon.
While the price hikes of oil have not hit the consumer marketplace yet, they serve as an indicator that higher gas prices are on the way. The rise in U.S. oil costs is due to several factors, according to Reuters, including increased demand for gasoline as more people start to travel again and oil production cuts by major oil-producing nations such as Saudi Arabia and Russia. These cuts have led to a decrease in global oil supply, driving up the price of crude oil.
“Florida gas prices are at their lowest level since late January,” said Mark Jenkins of AAA. “The recent dip was driven by falling oil prices. Unfortunately, that downward trend ended last week, and oil prices are back up, which means gas prices are likely to get more expensive soon.”
Florida’s most expensive gas prices reside in South Florida, with West Palm Beach serving as the costliest area in the state at $3.48 a gallon. Miami and Fort Lauderdale roadsters are also feeling the impact at the pump with average costs per gallon of $3.33 and $3.32, respectively. On the opposite end of the state, North Florida offers the state’s cheapest fuel with Fort Walton Beach ($3.07) and Panama City ($3.11).
GasBuddy, a fuel-tracking website, estimated that gas prices would peak in 2023 at an average of $4.25 to $4.65 per gallon in Miami, $4.15 to $4.55 in Orlando, and $4.10 to $4.45 in Tampa. The business claims that, barring unforeseen events, the summer season would likely see the highest prices, which would then be followed by seasonal swings and a drop in prices following Labor Day.
As per GasBuddy, prices might fluctuate seasonally due to refinery maintenance in the spring and autumn as well as the Clean Air Act, which has been gradually removing certain pollutants from fuels. Refineries begin their spring maintenance as they run out of the cheaper winter mix of gasoline in favor of the more expensive summer blend. The adjustment has been attributed to price rises ranging from 35 cents to 85 cents on average over the last ten years.
“It’s very common to see gas prices rise this time of year,” added Jenkins. “Gasoline demand in Florida often reaches its highest point of the year during March. That’s because warming temperatures entice Floridians, winter residents, and spring breakers to all travel Florida roads. In addition, this is the time of year when oil refineries conduct seasonal maintenance and begin producing summer gasoline, which is more expensive to produce than winter fuel.”
The fundamental difference between winter and summer-blend gasses, according to oil seller AMS, is the concentration of Reid Vapor Pressure (RVP), a measure of how easily it evaporates at higher temperatures. Winter-blend fuel necessitates a higher RVP. When temperatures are more frigid and the fuel doesn’t evaporate quickly enough, a car’s engine will run less efficiently. To manufacture winter-blend fuel, refiners typically mix winter gasoline with butane, a low-cost addition with a high RVP.