The nationwide average price of gasoline some seven days ahead of the Memorial Day weekend is almost identical with price levels seen in 2013 and 2012, but dramatic differences are observed when one moves beyond the average and examines detailed fuel prices in states and cities.

The nationwide average this weekend is likely to be between $3.60-$3.64 gal, or within a few pennies of the $3.64 gal average from Memorial Day 2012 and the $3.63 gallon average on the holiday in 2013. But statewide averages should range between $3.35 gallon and $4.35 gallon, reflecting the widest regional diversity in recent memory.  What’s more, the diversity is bi-directional with some states kicking off the driving season with much lower price offerings, while other areas find stiff increases versus previous years.

Example: One year ago, Minnesotans faced average unleaded regular prices of $4.20-$4.30 gallon ahead of Memorial Day weekend.  This year, those same Minnesotan drivers find average prices of $3.50 gal. However, motorists who actively shop for their fuel with the GasBuddy “app” can find fuel for less than $3.30 gallon, resulting in a fill-up that costs $12-$15 less than last year.

The rest of the U.S. heartland finds distinctly advantaged prices when compared to last year. Average price decreases of 10-30 cents per gallon regularly show up in Colorado, Iowa, Illinois, Kansas, Missouri, North Dakota, Nebraska, New Mexico, Oklahoma, South Dakota, and Wisconsin.

In contrast, consumers in about half of the fifty states now see average gasoline prices that are 10-30 cents per gallon higher when compared to last year. Pennsylvania motorists are the most adversely impacted, paying about 30 cents per gallon more than what they meted out for fuel one year ago.  Smaller, but considerable, year-on-year increases show up at every East and Gulf Coast state as well as a few western states such as California and Nevada.

What’s behind this incredibly diverse U.S. fuel picture?

GasBuddy compiled a short list of the key steering currents which have acted to depress prices for many inland markets, while lifting values on the coasts. Examples include:
–        Uneven refining operations. Last year saw nothing less than a major reconfiguration of large refineries in Great Lakes and Great Plains’ states. A much lighter schedule of maintenance has prevailed in 2014. On the other hand, Gulf Coast refineries have seen one of the most aggressive spring maintenance schedules in recent memory.
–       Huge differences in crude costs. Refiners in the Rocky Mountain and upper Midwestern regions could buy heavy Canadian crude for about $85 barrel recently. Robust new production coming from the Canadian oil sands has delivered some of the most advantaged crude in North America. In contrast, West Coast refiners are disadvantaged. Prices for Alaskan North Slope (ANS) crude currently fetch a price that is just shy of $110 barrel.
–      Diminished imports. Three years ago, U.S. ports typically handled 1-million barrels per day or more of imported gasoline from Canada, Europe, and the Caribbean and most of that fuel came in to East Coast cities.  More recently, the U.S. has turned into a net exporter, regularly sending more gasoline offshore than it brings in from foreign destinations.

GasBuddy analysis suggests that the prognosis for the first two months of the driving season is for continued temperate prices. The restart of major refineries that are moving through second quarter maintenance should insure that gasoline production is near record levels. Meanwhile, efficiency gains in the light vehicle fleet and demographic changes in the population (older people tend to drive less) should combine to keep motor fuel demand flat at best.

Gasoline prices for the latter part of the driving season will be tied to the 2014 Hurricane Season. The U.S. has added plenty of refining capacity this century, but most of the additional capacity lies between Corpus Christi, Texas and Pascagoula, Mississippi. An active storm season could inspire precautionary shutdowns that might tighten supplies through the broad geography that is supplied by Gulf Coast refiners. Refinery shutdowns could resonate loudly through several dozen states, since some Gulf Coast refiners have export commitments to foreign countries.

Postscript:  Most people inaccurately assume that gasoline prices rise from Memorial Day through July 4th, but in fact, GasBuddy data shows that motor fuel prices have dropped in nine out of the last fourteen years in this century. The last year that saw higher prices on July 4 than on Memorial Day weekend was 2009. The national average price has drifted lower in each of the last four years by 23 cents per gallon.