State drivers paying more

SC gas prices spike despite domestic oil boom

Domestic oil boom easing prices in U.S. interior but not on East Coast

krupon@thestate.comJanuary 17, 2013 

  • Gas gauge

    South Carolina drivers are seeing a slight decline in prices at the pump. Here’s the average price of a gallon of regular unleaded gasoline.

    Columbia

    Wednesday: $3.20

    Week ago: $3.22

    Month ago: $3.03

    Year ago: $3.22

    South Carolina

    Wednesday: $3.20

    Week ago: $3.21

    Month ago: $3.03

    Year ago: $3.23

    SOURCE: AAA

— S.C. drivers typically enjoy among the lowest gas prices in the nation – usually about 20 cents below the national average.

But not recently.

In recent weeks, S.C. prices have been higher than about half the states in the nation and only about 10 cents below the national average.

That cost run-up isn’t expected to change soon.

A domestic oil boom is easing prices in the interior part of the country, but prices remain high on the East Coast because of tight shipping from the Gulf Coast, said Tom Kloza, chief oil analyst for the Oil Price Information Service. “It changes the batting order,” Kloza said.

South Carolina had an average gas price of $3.20 a gallon Wednesday, according to AAA. Typically, the state ranks in the bottom five nationally for gas prices.

But eight states now have gas below $3 a gallon: Utah, the lowest at $2.84; Colorado; Wyoming; Idaho; Missouri; Oklahoma; Minnesota; and New Mexico. South Carolina ranks 23rd – with gas just 9 cents below the national average Wednesday of $3.29.

High gas prices in recent years and strides in technology, including fracking, have sparked domestic oil production throughout the nation, but particularly in the crude-rich West. Refineries, especially in the Rockies, “have access to much, much cheaper crude than East Coast refiners,” Kloza said.

Even though Gulf Coast refineries are part of that boom and can produce plenty of relatively inexpensive crude, shipping is a problem. Pipelines are clogged like overbooked aircraft, Kloza said, which means much of the oil needs to be shipped over the water. But a shortage of approved vessels is pushing up shipping prices, Kloza said.

That is expected to keep prices in South Carolina and other East Coast states closer to the national average at least through the middle of the decade, Kloza said. About a dozen states on the East Coast, in fact, are seeing prices higher than they were a year ago while most other states have prices lower than a year ago, Kloza said.

“The East Coast has suddenly become one of the more expensive markets in the country,” he said.

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