June 5, 2023

Demand, Refinery Shutdowns Boost Gas Prices

With global demand up and refining capacity down, average gasoline prices have jumped 57 cents a gallon in Florida since the end-of-the year holidays.

Florida motorists Monday were paying an average of $3.56 a gallon for regular unleaded gas, a nickel above the national average and 15 cents higher than a week ago, according to the AAA auto club.

Florida’s average price was $2.99 on Dec. 27.

"It's unusual to see big gains like this in January, but global fundamentals have kept upward pressure on prices at the pump,” AAA spokesman Mark Jenkins said in a prepared statement.

“Oil investors are bullish that global fuel demand will rise now that China, the world's largest oil importer, is reopening its economy.”

Part of the reason for the price increase is companies taking crude-oil refineries out of operation for maintenance, reducing the amount of fuel available. Refineries operated at 95 percent of capacity as 2022 ended.

They are now operating at about 85 percent of capacity.

Meanwhile, global demand has roughly doubled from a year ago, just as China is reopening from COVID-19 restrictions and a European ban on Russian oil products is due to start later this week.

In Florida, the highest average price was in the West Palm Beach area at $3.74 a gallon. The lowest average was in the Panama City area at 3.31 a gallon.

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