Gas prices hit New Year’s high in San Diego County: What’s in store for 2024

SAN DIEGO — San Diego County has started 2024 with a modest uptick in the average price of self-serve regular gasoline after a three-months retreat from last year’s over $6 high.

The average price on Jan. 1 was $4.779 at the county’s pumps, according to figures from the AAA Oil Price Information Service — about $1.489 cheaper than the area’s peak during an astronomical run-up in September of last year.

However, prices have started to level-off — and rise slightly — after this decline from the last few months that brought some much needed relief to drivers at the pump, keeping the county at a price that set a record for the highest-ever average on the first day of the year.

On Thursday, the price rose for the seventh time in nine days since hitting its lowest point in recent months on Dec. 22. According to AAA, the region stands at an average of about $4.782 per gallon of gas, up roughly three-tenths of a cent from Jan. 1.

What to know about 2024 changes to the electric vehicle tax credit

With this slight increase over the last week, San Diego drivers may be wondering what the trend could mean for gas price trends for the remainder of the year — and how long prices below $5 may last.

“It is trending upward just a little bit, but not very quickly,” said Marie Montgomery, spokesperson for the Auto Club of Southern California. As she explained, San Diego still closed out 2023 having paid less on average during the year than the record-breaking levels in 2022.

The rise in the final days of the year was mostly caused by unplanned maintenance at refineries near Los Angeles towards the end of December — something that typically contributes to the increases consumers see at the pump during the first quarter of the year.

Fuel analysts say consumers may not see the more substantial increases again until refineries start to make the switch to the summer-blend of gasoline that gets distributed across California starting in February.

The summer blend of gasoline, which is required by federal law to be used during the warm weather months, is refined to prevent its evaporation in warmer temperatures, reducing smog and other emissions.

For consumers, however, the switch to the summer blend can cost anywhere from 20 to 25 cents per gallon more at the pump, since it is more expensive to produce and refineries have to shut down briefly before processing it.

Additional reductions in output due to regular maintenance during this time add to some of the price changes that consumers see between February and April.

But before then, prices could go back down again slightly before the summer-blend transition.

Patrick De Hann, head of petroleum analysis at GasBuddy, says fixes to some of the more recent refinery issues should be more or less sorted out in the coming weeks, possibly bringing down prices by a few cents a gallon. Recently reported increases in gasoline inventories on the west coast could also be an indicator of a small price drop coming.

“I think there’s a window of opportunity for the next several weeks that prices could come down gently, but it’s kind of the calm before the storm so to speak,” De Hann said. “By mid-February, I would expect prices to start going up again and I do think we’ll probably rather easily hit $5 a gallon.”

Exactly where prices will rise beyond that — and how quickly — will likely depend on whether the state’s supply can meet the demand.

“There’s increased economic expectations this year of continued recovery from the pandemic and so that would of course, place a greater demand on gasoline usage,” Montgomery said. “As far as the supply side, this is really early days and we don’t know what’s going to happen … this may be an issue down the road.”

One of those unknown impacts could be prolonged issues with shipping oil from the Middle East through the Suez Canal amid the war in Gaza. According to AAA, California imports about 59% of its oil from foreign sources — around half of which comes from the Middle East.

Whether production at California’s refineries will make it through the year without any major limitations to capacity also remains an open question.

The year in clean energy: Wind, solar and batteries grow despite economic challenges

No major oil refineries have been built across the U.S. in decades, meanwhile California’s existing refineries have fallen from 17 in 2015 to 14 in 2023. This has led to reductions in output capacity roughly 5% above the national rate, according to the U.S. Energy Information Administration.

“The number of refineries means that you are becoming more and more susceptible to even small disruptions,” De Hann said. “When refineries run normal in California, things are generally fine … it’s really more of a guess, on if any large scale issues will happen at California’s refiners to be able to accurately predict how high and how long the pain at the pump will go on.”

California may have a bit of “breathing room” with this volatility, De Haan said, in part given the state’s push to transition to electric vehicles bringing the demand for gas down slightly. Something to watch will be how growing cities like Las Vegas and Phoenix, who rely on the state’s gasoline production, could offset changes in consumption.

Looking ahead, GasBuddy predicts that California drivers could be paying an average of about $4.26 to $4.65 per gallon at the pump this year. The company’s outlook estimates that the highest daily average for cities in the state could range from about $5.35 to $6.35 per gallon.

For the latest news, weather, sports, and streaming video, head to FOX 5 San Diego.