Gas prices in Arizona were the fifth highest in the country on Monday.
While gas prices hovered at more than $3 a gallon on New Year’s Eve, drivers in the Phoenix metro north are paying $4 a gallon, according to AAA Arizona. The increase has motorists and local economists scratching their heads.
Just a week ago, a gallon of go juice averaged $3.63 in Arizona. Compare that to a whopping $3.95 on Monday, and you have a 32 cent increase in seven days.
In Greater Phoenix, it’s even worse. Valley-wide prices averaged $4.23 on Monday, with every town and city 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 averaged an eye-watering 73 cents less — just $3.49 Monday.
“I’m as confused about the price increase in Phoenix as you can 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 have done some work looking at the prices, but I am still not sure what is behind the increase.”
Prices in Tucson are more manageable, averaging $3.64 on Monday. In Flagstaff, a gallon of gas will set you back $3.73. And things are a little more expensive in Lake Havasu City, where a gallon of gas averages $3.84, according to AAA Arizona.
One reason gas is cheaper in Tucson is that the city is supplied with Texas oil, while Phoenix is supplied with California oil, according to GasBuddy energy analysis expert Patrick De Haan.
But Yuma is also served by refineries from California, which has puzzled many.
Why are gas prices in Arizona rising so quickly?
De Haan told New times that “Arizona is at a major disadvantage” when it comes to gas prices because the state “goes far beyond federal requirements” when it comes to fuel quality regulations.
Because Phoenix is among the five most polluted US cities, Arizona has in recent years become stricter on fuel regulations than most other states.
On top of that, Southern California refineries 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 gas prices in Arizona start to drop?
While De Haan said prices are expected to continue rising for at least another month, he believes an end is in sight. But things could get worse before they get better.
The energy expert predicts that prices will continue to rise in Arizona, peaking in either April or May at as much as $4.75 per gallon. But he does not think gas prices will reach last year’s peak of $5.70 in June 2022.
“The goalposts for how high we can go can change based on volatility and uncertainty,” he said. “However, because prices in Arizona increased earlier, I predict they will also decrease earlier.”
De Haan predicts that as the 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.”