U.S. gasoline prices rise as costs fall for Texas drivers

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By Arthur Murray
For business
Demand is driving gasoline prices up in many areas of the country.

U.S. gasoline prices are up 16 percent from the first of the year, according to the American Automobile Association, and the increases might not have peaked. But the story is different in Texas, where prices have fallen 23 percent since Jan. 1.

Why are prices rising? AAA blames it on higher than usual demand. The Energy Information Administration reported last week that U.S. demand for gasoline grew by 520,000 barrels of petroleum per day from the same time last year. Week over week, demand went from 9.59 million b/d to 9.78 million b/d.

That demand, which AAA equated to typical summer demand, meant that prices nationally have for the most part been going up – 36 cents per gallon for regular gasoline since Jan. 1 to $2.61 per gallon.

“Gas prices continue to fluctuate across the country, though on the week the majority of states saw prices only increase or decrease by one or two cents,” says Jeanette Casselano, AAA spokesperson. “The largest volatility at the pump continues to be seen in the West Coast & Rockies states along with a handful of states in the Great Lakes and Central region.”

What’s happening in Texas

As mentioned previously, prices have declined since Jan. 1 in Texas – falling from $2.41 per gallon to $2.25 per gallon on Nov. 1. The current Texas price is 13.8 percent lower than the national average and was the nation’s third-lowest on that date.

Following are the states with the 10 lowest prices on Nov. 1:

State Nov. 1 price per gallon State Nov. 1 price per gallon
Louisiana $2.23 South Carolina $2.28
Mississippi $2.24 Virginia $2.30
Texas $2.25 Arkansas $2.31
Alabama $2.28 Tennesee $2.31
Missouri $2.28 Oklahoma $2.32

As Casselano mentioned, prices were higher on the West Coast, with California reporting the highest price in the nation – $4.07 per gallon for regular gasoline.

State Nov. 1 price per gallon State Nov. 1 price per gallon
California $4.07 Alaska $3.20
Hawaii $3.67 Idaho $2.95
Washington $3.43 Arizona $2.90
Nevada $3.37 Utah $2.82
Oregon $3.34 Colorado $2.79

Texas drivers have paid less than the national average every month of 2019 except January. Following is a chart showing the average Texas price on the first of each month, the average U.S. price on the same day, and the difference between the two:

Gasoline prices Nov. 1 Oct. 1 Sept. 1 Aug. 1 July June May April March Feb. 1 Jan. 1 2019 avg.
Texas 2.25 2.35 2.29 2.47 2.42 2.51 2.62 2.48 2.18 1.99 2.93 2.41
US 2.61 2.66 2.58 2.72 2.71 2.83 2.88 2.69 2.41 2.26 2.25 2.60
% above/below -13.8 -11.7 -11.2 -9.2 -10.7 -11.3 -9.0 -7.8 -9.5 -11.9 30.2 -7.4

What about drivers of electric vehicles in Texas?

The U.S. Department of Energy has developed a measure called an eGallon to compare the cost of fueling a vehicle with electricity compared with a similar vehicle that uses gasoline. The DOE calculates how much electricity the most popular electric vehicles would need to travel the same distance as similar model gasoline-powered cars. That amount of electricity is then multiplied by the average cost of electricity in the state.

That helps in states with cheap electricity. In Texas, an eGallon cost about $1.07 in November,  the 14th best-best rate in the country, about 11.6 percent lower than the national rate of $1.21 per eGallon.

Louisiana drivers page the lowest rates, at 87 cents per eGallon. Following are the 10 states with the lowest eGallon rates:

State Price per eGallon State Price per eGallon
Louisiana $0.87 Oklahoma $0.97
Washington $0.91 Tennesee $0.98
Arkansas $0.92 Mississippi $1.02
Idaho $0.93 Oregon $1.02
Kentucky $0.97 Utah $1.02

Drivers in Hawaii and Alaska pay the most to drive their electric vehicles. Following are the 10 states with the highest eGallon rates:

State Price per eGallon State Price per eGallon
Hawaii $2.83 California $1.81
Alaska $2.14 New Hampshire $1.77
Rhode Island $1.98 New York $1.67
Massachusetts $1.96 Maine $1.63
Connecticut $1.94 Vermont $1.52

Because they have access to cheap electricity, Texas drivers have paid less than the national average each month so far this year. Following is a chart showing average Texas prices during the month, the average U.S. price, and the percentage difference between the two:

eGallon prices Nov. Oct. Sept. Aug. July June May April March Feb. Jan. 2019 avg.
Texas $1.07 $1.08 $1.10 $1.09 $1.06 $1.06 $1.06 $1.05 $1.07 $1.06 $1.05 $1.07
U.S. $1.21 $1.21 $1.21 $1.21 $1.17 $1.17 $1.16 $1.13 $1.18 $1.17 $1.18 $1.18
% difference -11.6 -10.7 -9.1 -9.9 -9.4 -9.4 -8.6 -7.1 -9.3 -9.4 -11.0 -9.3

While gasoline prices likely will continue to rise this winter, Texans could be isolated from the increase. They may not be as lucky on eGallon prices. Higher than usual wholesale electricity prices in late summer – yes, caused by demand – could drive up electricity rates as the year closes and even into next year.