SAN FRANCISCO, Calif. — Gasoline prices almost always rise early in the year.
Just not this fast. Or this high.
The national average for a gallon of regular jumped 17 cents in the last week, reaching $3.52. In Houston Monday, the average price was $3.357 a gallon, up from $3.175 a week ago.
Californians suffered even more of a shock, with the statewide average climbing 23 cents in one week, to hit $3.91 on Monday, according to a daily price survey from the AAA auto club. Gas in California now costs more than it ever has at this time of year.
Driving the price spike nationwide is a surge of speculative investment in the markets for oil and gasoline, as sentiment about the economy improves. The run-up primes drivers for another expensive year at the gas pump, at a time when Americans are already spending a greater portion of their income on fuel than they have in decades.
“There is this idea that the worst is past and the economy is going to chug along, even if it’s chugging along slowly,” said Brian Milne, refined fuels editor for the Telvent DTN business information service.
Gasoline futures contracts traded on the New York Mercantile Exchange have surged about 12 percent since mid-January, although their price dipped on Monday. Crude oil, which had been stuck around $87 per barrel for much of November and December, now costs $96.
Economic growth usually leads to stronger gasoline sales, although that hasn’t happened in recent years. But the number of big investors betting that gasoline prices will rise — taking long positions on gas futures — has now reached its highest point since last April, Milne said
“You have this expectation that gasoline demand will be better this year than last year,” he said. “Whether it actually happens is a different story.”
At the same time, California refineries have started their spring “turnaround” season, a period when they cut production, undergo maintenance, and switch to making fuel blends used in warm weather.
The state’s prices usually rise in February as a result. This time, turnaround amplified the price spike that was already underway across the country. In addition, Chevron Corp.’s Richmond refinery still hasn’t returned to full production after last year’s fire. And the company’s refinery in El Segundo (Los Angeles County) suffered a malfunction in January.
“Production this time of year is typically quite a bit lower than normal, and we’re on the low end of that,” said Alison apRoberts, spokeswoman for the California Energy Commission.
The price run-up is already starting to lose steam. After jumping several cents each day last week, the national average rose less than a penny between Sunday and Monday. But prices could continue drifting upward once warmer spring weather lures more people onto the road.
The current price increase places Americans on track for another expensive year at the pump. Last year, the typical U.S. household spent just under 4 percent of its pre-tax income on gasoline, according to a report issued Monday by the Energy Information Administration, the statistics branch of the federal Department of Energy. With the exception of 2008, when oil prices briefly shot above $145 per barrel, that’s the highest percentage since the early 1980s.
Gasoline prices have risen so high that a separate report released Monday found that drivers now spend almost as much on fuel — over the lifetime of their cars — as they did for the cars themselves.
The report, from the Union of Concerned Scientists public advocacy group, calculated that an average vehicle costing $24,520 will consume about $22,674 in gasoline over its 15-year lifespan.
Buying a fuel-efficient car can help ease the pain. The report compared the lifetime fuel consumption of two versions of the Ford Fusion, one with a standard engine, the other with a hybrid. The hybrid engine added $3,500 to the car’s purchase price but saved $9,000 in gasoline purchases over 15 years, according to the report.
“People think, ‘Well, why should I buy the hybrid if it only gets 20 percent better mileage?’” said Joshua Goldman,? the report’s author. “You can spend a little more up-front and save a lot over the long run. It pays off big-time.”