A technology firm that monitors the fuel industry expects gas prices to exceed $4 a gallon in 2023 as the average gasoline price in Florida climbs back above $3 a gallon.
In its annual outlook released Wednesday, Boston-based GasBuddy predicted that gas prices would peak at an average of $4.25 to $4.65 a gallon in Miami, $4.15 to $4.55 in Orlando and $4.10 to $4.45 in Tampa.
Barring unexpected changes, peaks are likely to occur in the summer, followed by “normal seasonal fluctuations,” with prices falling after Labor Day. GasBuddy predicts the national average will fall back to around $3.17 by early 2024.
The average price for a gallon of regular unleaded gasoline in Florida was $3.12 on Thursday, compared with a national average of $3.16, according to the AAA Auto Club.
The national average hit $5 in June and $4.89 in Florida before dropping steadily for most of the rest of the year. Prices started to rise this week after the Florida average fell below $3.
A repeat of 2022 is “highly unlikely”, but “dark clouds” remain, Patrick DeHaan, head of oil analysis at GasBuddy, said in a report.
“2023 is not going to be a piece of cake for drivers. It could be expensive,” DeHaan said. “The national average could top $4 a gallon as early as May — and that could last through most of the summer driving season.”
National gasoline prices could dip below $3 a gallon in February, climb to $3.99 by June, stay above $3.80 in the summer, and decline by the end of the year, according to the forecast.
GasBuddy’s forecast does not assume a “severe recession,” but rather “some degree of economic reopening that will limit oil demand.” It cited uncertainty over China’s easing of its COVID-19 mandate, OPEC’s attempt to balance the oil market by cutting output, and Russia’s ongoing war in Ukraine.
“The East Coast remains highly vulnerable to Russia’s war on Ukraine, as European countries seek supplies of oil and refined products from elsewhere, putting upward pressure on East Coast prices,” the report said.
Other “unplanned obstacles” could include pipeline closures and weather problems, such as hurricanes in the Gulf of Mexico.
This year, the national average is expected to be $3.49 a gallon, down from an average of $3.96 in 2022.
At that pace, the average U.S. household is expected to spend $2,471 on natural gas in 2023, down from $2,748 in 2022.
GasBuddy acknowledged its forecast was not gospel, predicting a national average of $3.99 this year, the lowest margin of error since it first made its annual forecast in 2012.
The company said its “forecasts were higher than actual results in eight out of 10 years, with only two years of forecasts being lower than actual results in 2018 and 2021.”
GasBuddy noted that prices are subject to seasonal rises and falls related to refinery maintenance in the spring and fall and the Clean Air Act, which has been slowly removing some pollutants from fuel.
The spring maintenance came as refiners depleted inventories of winter blend gasoline to produce the more expensive summer blend. Over the past decade, average price increases of 35 cents to 85 cents have been attributed to this change.
Unleaded gasoline prices in Florida averaged just under $3 a gallon for most of the Christmas weekend. The West Palm Beach area had the highest average price on Thursday at $3.29 a gallon, while the Panama City area had the lowest average price at $2.92.