Washington state gas prices could be lower in 2013 if refineries stay on track

Published: January 9, 2013 

In a new report, AAA expects national average prices to peak around $3.80 a gallon and Washington state prices to peak around $3.95 a gallon in 2013.

Andy Bronson — The Bellingham Herald

Analysts are expecting Washington residents to pay slightly less for gas this year, but plenty of factors could mess up that forecast.

With increased domestic oil production and lower demand, AAA expects gas prices to be less expensive across the country compared to 2012. In a new report, AAA expects national average prices to peak around $3.80 a gallon and Washington state prices to peak around $3.95 a gallon.

In a separate study, GasBuddy, a price-tracking website, predicts gas prices will peak nationally in April, reaching $4.05 a gallon.

The AAA forecast is based on the premise of no significant unanticipated events taking place. In the gas industry, unanticipated events happened often in 2012, particularly on the West Coast. According to GasBuddy, eight of the 12 West Coast refineries had at least one outage last year, including BP Cherry Point, which was shut down for about three months because of a fire.

If Washington and California refineries continue to have problems, expect prices to spike again locally, said Patrick DeHann, a senior petroleum analyst for GasBuddy.

"The West Coast is vulnerable (to price spikes) because the refineries are isolated from the rest of the country," DeHaan said.

Jennifer Cook of AAA Washington agreed, adding that the West Coast has fewer refineries than many other regions, so it only takes one refinery outage to have a big impact. Crude-producing regions are also farther away, so it's more expensive to get the oil to the West Coast refineries.

Spring is expected to be the time gas prices peak locally. Cook said that's when refineries are reducing production while transitioning from winter-blend gas to a summer blend. With production slowing, it's usually when refineries also do maintenance work. If the process goes smoothly, Cook said she would expect prices to rise between 10 and 30 cents a gallon from current prices.

According to AAA's daily fuel gauge report, the average price for a gallon of gas on Tuesday, Jan. 8, in the Bellingham metro area was $3.54, the same price as a month ago.

Reach Business Editor Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Read his business blog at blogs.bellinghamherald.com/business or follow him on Twitter at @bhamheraldbiz.

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