U.S. drivers hitting the road for Thanksgiving are facing the highest seasonal gas prices ever, according to GasBuddy. The national average is projected to be $3.68 per gallon on Thanksgiving Day, nearly 30 cents higher than last year and over 20 cents higher than the previous record set in 2012.
WAMC's Jim Levulis spoke with Patrick DeHaan, the head of petroleum analysis for GasBuddy, about what’s causing the high prices.
DeHaan: Well, we are seeing gas prices start to slowly decline. The average price for gasoline in Albany, down a couple of cents in the last week, the average about $3.97 a gallon. It's still going to be the most expensive Thanksgiving Day we've ever seen. The national average likely to drop to about $3.68 on Thanksgiving Day, but that's still 24 cents higher than the record on Thanksgiving which was back in 2012 when the national stood at $3.44. So while prices have come down, they are seasonally high. But the good news is prices will continue to moderate as motorists hit the road and as they come back from their travels.
Levulis: And what are the main forces behind the seasonally high prices?
DeHaan: Well, much of this is due to the fact that inventories of gasoline and especially diesel are very tight because of refinery maintenance season that's been ongoing. Coupled with less refining capacity. The United States has lost about a million barrels a day of refining capacity since 2019, much of which is really due to the pandemic, that being exacerbated by Russia's war in Ukraine, which is causing countries to sanction that oil, has meant that there's less supply globally. So quite a few challenges, leading to what we're experiencing this Thanksgiving.
Levulis: And now some states like New York, you mentioned those regional prices, and Connecticut, they've suspended their gas taxes, some counties have done so as well. Have those moves made a large impact on prices?
DeHaan: So they certainly have had an influence. Typically, Connecticut is a state that's usually about 10 to 15 cents above the national average. And right now Connecticut is basically right about at the national average. So certainly the waiver of gasoline taxes everywhere where we have seen that's happened in several states, it has been largely passed along. So that's certainly one of the biggest reasons why Connecticut prices are quite a bit lower than what we're seeing in Albany, Connecticut. Prices statewide about $3.74 gallon compared to Albany at $3.97 a gallon.
Levulis: Now, overall, nationally, though, the seasonally high prices as we talked about seemingly not having a negative impact on those planning to drive this Thanksgiving holiday though, right?
DeHaan: Well, maybe a limited impact. We are seeing more Americans planning to hit the road this Thanksgiving. 38% of Americans to hit the road this Thanksgiving. That's up from 32% a year ago. So the higher prices aren't detracting many but likely is a major factor for why Thanksgiving travel isn't quite what it was back in 2019, when nearly two-thirds of Americans said that they'd be hitting the road.
Levulis: So that was going to be my next question, travel in terms of pre-COVID levels, whether it be Thanksgiving holiday travel or just general travel, still not back there yet?
DeHaan: Yeah, that's right. We still have quite a ways to go there. And part of the reason why we probably won't get there very quickly, is gas prices remain relatively high. In fact, in the GasBuddy holiday travel survey that we had put out, a majority of Americans said that high gas prices are impacting their travel plans. In fact, compared to last year, rather surprising that fewer Americans this year actually citing high gas prices for impacting their travel plans, about 46% of Americans citing high prices this year compared to 51% a year ago. So actually, it does seem like Americans are impacted less by the high prices but still a majority of them citing prices for why their travel plans may be abbreviated.
Levulis: In terms of the most congested travel periods expected for this Thanksgiving. When are those estimated to be?
DeHaan: Well, Wednesday between 11 a.m. and 2 p.m. are likely to be the busiest, amongst the busiest. Friday between 8 and 11 a.m. are likely to be the two busiest times combined with Saturday morning and Sunday morning as motorists drive back as well. So throughout the weekend, the late morning period seems to be relatively busy and Wednesday afternoon going to Thanksgiving, early afternoon seems to be the busiest.
Levulis: And you mentioned some moderation on the horizon. But you also mentioned some issues with refining capacity. What's on the horizon for the rest of the holiday seizing season and even heading into 2023 when it pertains to gas prices here in the U.S.?
DeHaan: Well, at least for the next few weeks, it looks as oil prices have continued to decline to $83, the lowest level in months, that we could see gas prices falling into the rest of the year. Now things could abruptly change, there could be a shift in geopolitical tensions or refining issues. But barring those factors, we could see gas prices falling 10 to 25 cents a gallon between now and Christmas. So certainly could be a good end to the year, so long as there are no unexpected outages or issues that arise.
