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Get Ready for Lower Fuel Prices This Summer

The Exchange

Gasoline prices are falling nationwide this year, but there’s no reason for drivers to get too excited about it just yet.

The average price for a gallon of gas is expected to go down slightly this summer versus both 2011 and 2012, according to a new report from the U.S. Energy Information Administration (EIA), but will still likely top out at $3.63 per gallon during the big travel months of April through September. That’s down from $3.69 last year and $3.71 in 2011. Back in 2010, which seems like a lifetime ago in terms of fuel prices, drivers were rolling out of gas stations at just $2.76 per gallon.

Lower crude oil prices are primarily to thank for these (admittedly tiny) new savings, but U.S. gasoline inventories are also now at healthier levels than in recent years and that’s helping to keep prices down, according to EIA. Last year, 98,000 barrels per day were withdrawn from this inventory to keep up with fuel demand, and that figure is expected to be cut in half this summer.

Of course, fuel prices are very local, ranging from pricey on the coasts to (usually) cheaper in the middle of the country. And that trend is expected to hold for summer 2013, where $3.89 per gallon could be the norm on the west coast and $3.47 the average down along the Gulf of Mexico. The chart below illustrates EIA’s expectations for gas prices by region.

Interestingly, EIA is also expecting gas consumption to fall by as much as 20,000 barrels per day this summer, thanks to better fuel efficiency standards, while increased domestic production could trim net gasoline imports by 1.1 percent versus 2012.

What do you think? Does cheaper gas mean you are more likely to travel by car this summer? And are you seeing any real savings at the pump yet?