Drivers could be paying more than $4 for a gallon of unleaded gasoline by the late spring and summer months as demand increases, tensions rise in the Middle East, companies switch to new formulas and maintenance work takes place at refineries across the country.

In Lafayette on Monday, the average for a gallon of gas was $3.42, according to the gas-price tracking website gasbuddy.com. That’s up from an average of $3.01 in February 2011 and

$2.46 in February 2010.

Gregg Laskoski, senior petroleum analyst with gasbuddy.com, said the national average on Dec. 31 was $3.25 per

gallon.

“We expect that gas prices are going to go up significantly because we are starting at the highest price point we have ever seen in the United States,” Laskoski said. “If we start 2012 at such a high price point, and we know that every spring gas prices go higher, it’s not outlandish to see them hit $4 a gallon.”

Over the last seven years, gas prices have increased an average of 93 cents from Dec. 31 to the peak price point in the following year. That means if the nationwide average is $3.25 per gallon, the national average by the summer could be around $4.18 per gallon.

“The dominant issue right now is the potential threat and conflict that could occur in the Middle East,” Laskoski said. Federal intelligent officials believe there is a chance that Israel could attack Iran sometime this spring.

“That creates a lot of nervousness in the financial market and builds a premium into the price of crude oil,” Laskoski continued. “Even if that were not to occur, we could see prices going higher because they do the same thing every spring. The refineries are in a difficult spot because they have to produce a ’summer blend’ gasoline, and at the same time they also have some scheduled maintenance issues. You also have aging infrastructure, so the refineries have unscheduled maintenance before they can ramp up and produce a ’summer blend.’”

Don Briggs, president of the Louisiana Oil and Gas Association, said a large company like Exxon can make more than 20 different kinds of “boutique” fuels, and different fuels are made for different cities, depending on emission requirements and specific local needs. But that kind of specialization is more costly for companies and refineries, and that cost is passed on to consumers at the pump.

“The refineries have to change what they are doing and make these different fuels,” Briggs said.

Laskoski said that because of federal regulations, refineries must produce a summer blend from May 1 to Sept. 30 that burns cleaner to reduce smog and pollution as more drivers hit the road for the summer travel season. The special additives needed to make this blend are pricey, another factor that leads to increased costs. On Monday, unleaded gas at most Lafayette stations ranged from $3.31 to $3.41 per gallon. The highest was at three Chevron locations, where gas was $3.51 a gallon, while the lowest was at Cigarettes and Checks on Kaliste Saloom Road, where it was $3.25 per gallon.

The variations among gas stations are usually because of the timing of when gasoline arrives at a station and wholesale prices, Laskoski said. Distribution and transportation costs also can play a role in the variations, while some companies are able to sell gas at lower prices because the refineries they use are able to produce it at a lower cost than others. While south Louisiana residents will more than likely see higher gas prices, they may not be as high as in other parts of the country. In general, Louisiana prices are running about average in the country. The highest gas prices are in California, where cities along the coast such as Eureka and Oxnard are selling gas from $3.60 to $3.99 per gallon. The lowest prices are in western states such as Wyoming, Montana, Colorado and Utah.

For example, in Billings, Mont., a gallon of gas is $2.94 to $3.16 a gallon, while in Salt Lake City, Utah, the price is $2.90 to $3.09 per gallon.

Louisiana’s proximity to refineries and oil-producing rigs is a main reason why the state’s prices usually don’t go as high as some other parts of the country.

“It can cost less because we refine it right here. It costs money to transport the oil to other parts of the country, so it may cost less here because it doesn’t cost very much to transport it,” Briggs said. “Those transportation costs and taxes do make a difference. There’s a lot of different ingredients that go into it.”

Laskoski said taxes in Louisiana average about 38.4 cents per gallon, as do most Gulf Coast states. But in Florida, the tax amounts to about 53.4 cents, and other states can see taxes as high at 67 cents per

gallon.

“The states like New York, Illinois and California, which all have extremely high taxes, are most likely to see the extremely high end of the price range when we talk about peak prices,” he said.

original article