While gas prices hovered at more than $3 per gallon at the turn of the new year, drivers in metro Phoenix are now paying north of $4 per gallon, according to AAA Arizona. The surge has motorists and local economists scratching their heads.
Just one week ago, a gallon of go-juice averaged $3.63 in Arizona. Compare that with a whopping $3.95 on Monday, and you have a 32-cent increase in seven days.
In greater Phoenix, it’s even worse. Prices throughout the Valley averaged $4.23 on Monday, with every city and town in Maricopa County charging more than the price of a Happy Meal for a gallon of black gold. Meanwhile, the price per gallon in neighboring Yuma County is averaging an eye-popping 73 cents less — just $3.49 Monday.
“I’m as confounded by the rise in prices in Phoenix as you may be,” economist Rick Merritt, president of Elliott D. Pollack & Company, an economic consulting firm in Scottsdale, told Phoenix New Times. “Phoenix has higher prices than most other places. We’ve done some work in looking at prices, but I’m still not sure what’s behind the increase.”
Prices in Tucson are more manageable, averaging $3.64 Monday. In Flagstaff, a gallon of gas will run you $3.73. And things are a little more pricey in Lake Havasu City, where a gallon of gas is averaging $3.84, according to AAA Arizona.
One reason why gas is cheaper in Tucson is that the city is supplied with Texas oil, while Phoenix is supplied with California oil, according to GasBuddy’s energy analysis expert Patrick De Haan.
But Yuma is served by refineries from California, too, which has puzzled many.
Why Are Arizona Gas Prices Going Up So Fast?
De Haan told New Times that “Arizona is at a major disadvantage” when it comes to gas prices because the state “goes far above and beyond federal requirements” when it comes to fuel quality regulations.
Because Phoenix is among the top five most polluted American cities, in recent years, Arizona has become more stringent about fuel regulations than most other states.
On top of that, refineries in Southern California are undergoing major maintenance work, De Haan said. Some unexpected complications during maintenance have delayed completion, which is now affecting available supplies.
Arizona also sits at the end of two pipelines that terminate in Phoenix and Tucson. “There is less supply at the end of a pipeline,” De Haan noted.
When Will Arizona Gas Prices Start to Fall?
While De Haan said that prices are expected to continue rising for at least another month, he believes there is an end in sight. But things may get worse before they get better.
The energy expert predicts prices will continue to climb in Arizona, peaking in either April or May at as much as $4.75 per gallon. But he doesn’t think gas prices will reach last year’s jaw-dropping peak of $5.70 in June 2022.
“The goalposts for how high we can go can change based on volatility and uncertainty,” he said. “But because Arizona prices increased earlier, I predict they will decrease earlier, too.”
De Haan forecasts that as summer progresses, prices should begin to ease, barring unpredictable events such as hurricanes, earthquakes, or a pandemic.
But, he noted, “We experts don’t have crystal balls.”