If $3 Gas is Back, is $4 Far Behind?

By Andrew Shain, The State, Columbia, S.C.

Feb. 22–Regular gas around the Columbia region generally is above $3 a gallon, again.

But could drivers be paying $4 a gallon by Memorial Day?

It’s not far-fetched.

February usually is a pretty cheap time of the year for fill-ups.

And prices rise in the spring.

More drivers take to the road for Easter and school spring breaks. Plus, refinery output falls with the annual change to smog-reducing summer blends of gas.

National averages between $3.50 and $3.75 this spring are not out of the question, predicted Tom Kloza, an analyst for the Oil Price Information Service.

“The records just keep on coming,” said Brian Milne of gas-industry tracker DTN, who agreed with Kloza’s forecast.

And that could be the good news.

Kloza’s prediction of $3.50 gas is based on a smaller-than-usual spring rally because drivers are buying less gas.

So what happens with a rally like in the past few years?

Gas could reach $4.17 to $4.75 a gallon, Kloza predicted.

Still, Kloza maintains that prices shouldn’t get that far because $3.25 a gallon is a “tipping point” where people will cut their gas consumption.

“Hence, a rise to $3.50 to $3.75 … should breed some demand destruction,” he said.

Palmetto State gas-price averages are usually about 15 cents below the national norm because South Carolina’s state fuel tax is among the country’s lowest.

South Carolina was one of just six states with gas averaging under $3 on Thursday. Columbia’s average also was just below $3, but many stations around town were charging prices above the mark Thursday.

Thanks to $100 per barrel oil, the Midlands’ average gas price has risen 14 cents since Friday, according to AAA data.

And local prices are rising faster than the national norms.

That’s because an oil refinery explosion in Texas this week is pressuring prices on fuel from the Gulf of Mexico, where South Carolina gets its gas, Milne said.

The last time it took three Washingtons to get a gallon of gas in the Midlands was around Memorial Day.

Columbia’s record remains $3.23 set in the days after Hurricane Katrina cut off the Carolinas’ gas supplies in 2005.

Now it appears that record might fall this spring.

“It’s hard to see where gas prices fall off the cliff,” Milne said.

Reach Shain at (803) 771-8619.

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