PHOENIX — The national average of gasoline is down 60 cents from a week ago, according to AAA. Meanwhile in Phoenix, the average price has increased.
Gas prices are certainly better than they were in June but after three months of steady declines the Phoenix Metro is now seeing a sudden, but small, rise in prices.
The increase is not occurring in all areas of the country. The trend in gas prices is also present in Arizona’s two major metro areas.
The company GasBuddy provides pricing charts for many metropolitan areas across the country.
When comparing the Phoenix metro to Chicago and Atlanta, the pricing trends in the past three months are mostly similar with prices peaking in late June followed by a steady decline.
The correlation ended last week when Phoenix prices ticked up while Chicago and Atlanta prices continued to fall.
The pattern is found within Arizona’s borders as well with Flagstaff joining Phoenix in the rise of prices while Tucson gas prices decrease.
The uniform price drop in average prices across the country that began at the start of summer is almost entirely due to a drop in oil prices.
Spot prices for WTI Oil, a US benchmark, reached a peak of $120 in June that has declined to $85 recently.
Since the price of oil is by far the largest component of what we pay at the pump, average gasoline prices fell along with oil.
The difference in pricing trends between Phoenix and Tucson typically depends on the time of year and where gasoline is being delivered from.
The Kinder Morgan pipeline extends from oil refineries in Los Angeles through southern Arizona to El Paso.
The pipeline delivers gasoline to the state refined in both California and Texas. Sixty percent of Arizona’s gas comes from California, which uses a more costly summer blend despite President Joe Biden temporarily lifting EPA regulations requiring it in certain counties.
Regulators there have also reported refinery issues that have hampered production, causing the price to rise.
The good news is California refineries will switch to the cheaper “winter” blend of gasoline soon which should adjust the prices down in Phoenix when completed.
Market observers are cautious, however, due to the impending rail worker strikes which could slow down crude oil delivery in some parts of the country.
