MONEY Gas prices

$2 Gas Should Be Making a Comeback Soon

Arco gas station, Riverbank, Stanislaus County, California, January 21, 2015.
Don Bartell—Alamy

Gas prices are expected to plunge this fall.

The current disconnect between low oil prices and relatively expensive gas prices has understandably been frustrating for American drivers. Oil prices are at a six-year low, so on the surface it makes little sense that prices at the pump would be soaring.

For the most part, gas prices are out of whack in two areas of the country—the Midwest and West Coast—and high prices there have driven the national average upward, to $2.66 today from $2.58 a week ago. Thankfully, the reasons for disproportionally high prices in these regions are expected to be addressed in the near future, and experts say we should be back on track for $2 gas by this autumn or early winter.

Specifically, refinery problems in California and Indiana have been blamed for the broader gas price hikes. An explosion at an Exxon Mobil refinery in Torrance, Calif., earlier this year has led to stubbornly high gas prices in California, including a few dramatic price hikes this summer as demand seems to have exceeded supply. (High prices in California and the West Coast have also led drivers to complain of price gouging.) Similarly, the recent outage at the BP refinery in Whiting, Ind., has caused ripples throughout the Midwest, with overnight increases of 40¢ per gallon in cities like Cincinnati. In Chicago, the current average is $3.46 for a gallon of regular, up 70¢ in a single week.

Industry experts say that these price hikes are temporary, however, and that the refinery issues in both California and Indiana will be less of a problem starting in September. Consequently, gas prices are expected to plummet this fall—assuming no other refinery problems or other complications arise.

Tom Kloza of the Oil Price Information Service told USA Today that as the industry manages to better cope with the Indiana refinery shutdown, he expects the national average to drop 10¢ to 15¢ in early fall, followed by further decreases of perhaps 50¢ per gallon by year’s end. Seeing as the national average is currently $2.66, that could mean $2 gas for much of the country by Christmas.

The Exxon Mobil refinery in California, meanwhile, is hoping to use some older equipment and make other adjustments by next month that would allow it to significantly increase production, which has been operating at just 20% capacity for months. For a variety of reasons, though, California always has among the nation’s most expensive gas prices, and drivers there will have to be patient as prices will likely ease down slowly.

Speaking specifically about California, Gordon Schremp, senior fuels specialist at the California Energy Commission, told Reuters last week, “We are going to have very expensive gasoline at least through Thanksgiving.”

MONEY Gas prices

Drivers Outraged as Gas Prices Soar While Oil Prices Plummet

paying for gas
Predrag Vuckovic—Getty Images/iStockphoto

Prices at some gas stations spiked 50¢ overnight.

Earlier this week, analysts proclaimed that $2 gas would be common once again around the U.S. Global oil prices are cratering, nearing $40 per barrel, and shrinking wholesale rates can only result in lower prices at the pump.

Or so one would think.

Despite plunging oil prices, drivers throughout the Midwest have been subjected to dramatic price spikes at gas stations this week. In Cincinnati, for instance, the price for a gallon of regular increased more than 40¢ overnight at some stations. Less than two weeks after analysts predicted average prices in Michigan would drop below $2 by Christmas, average prices have soared to $2.98 according to AAA. The average price per gallon in Illinois has inched up to just under $3 as well.

The rise in prices throughout the Midwest has caused the national average to increase too, hitting $2.65 on Friday. That’s after a 27-consecutive-day decrease in prices had left the average at $2.58 on Tuesday.

Indiana has been one of the hardest-hit states, with gas stations in greater Indianapolis charging 67¢ more than they were earlier in the week. Speaking of Indiana, a problem with a refinery in the state is what’s being blamed for broad price hikes throughout the region. Specifically, an outage in part of the British Petroleum refinery in Indiana—”the most important unit in the biggest plant in the Midwest,” per Bloomberg—is what’s causing prices to spike during prime summer driving season.

Drivers are understandably more than a little upset at the unexpected rise in gas station prices, and some aren’t accepting the refinery problem as a legitimate reason for the swift increase. In Michigan, Rep. Michael Webber even called on the state attorney general to launch an investigation into the matter, which he suggested smells of opportunistic price gouging. “This dramatic increase in price deserves a full investigation by a trusted Michigan official,” Webber said in a statement. “In Michigan’s improving economic climate, the necessity of this price spike must be questioned.”

Meanwhile, Reuters is reporting that the refinery outage being blamed for extraordinarily high prices in the Midwest “may take months to resolve.”

MONEY Gas

Why Gas Prices in Canada Haven’t Fallen Like They Have in the U.S.

Gas station along the Trans-Canada Highway (16th Avenue) in Calgary.
Rosanne Tackaberry—Alamy Gas station along the Trans-Canada Highway (16th Avenue) in Calgary

Blame the loonie.

Gas prices in Canada are cheaper this summer than they were in 2014. No surprise there. Gas prices are cheaper in much of the world, most notably in the U.S., where the average gallon of regular is 90¢ less expensive that it was a year ago.

But what’s interesting—and frustrating, for Canadian drivers—is that gas prices north of the border haven’t retreated nearly to the extent that they have in America. Dan McTeague, a former Member of Parliament in Canada and current senior petroleum analyst for GasBuddy, recently explained that Canadian drivers are only saving about 41¢ per gallon compared to last year.

The weakness of the Canadian dollar compared to its American counterpart is the biggest reason why gas prices haven’t dropped more. “As Canadians pay world price for fuel in U.S. denominations, the loss in purchasing power accounts for real disappointment at the pumps,” McTeague wrote. Gasoline prices in Canada are based on global market rates, using American dollars, even when it is produced and refined in Canada.

Speaking with CBC News, McTeague said that the weak Canadian dollar explains about 50% of why gas prices haven’t fallen as much there. A shortage of supply in the U.S. accounts for perhaps 30% more of the problem, according to McTeague. Since Canada gets some of its gas from the U.S., that shortage raises prices north of the border as well.

“The rest is simply what I refer to as ‘mystery cents,’ where refiners are able to pass on higher prices without much reason,” said McTeague.

MONEY Gas prices

Gas Prices Under $2 Per Gallon Will Be Common Again Soon

In some places they're already here.

Gas prices have fallen 27 days in a row, according to AAA, hitting a national average of $2.58 for a gallon of regular as of Tuesday. That’s roughly 20¢ cheaper than it was a month ago, and 90¢ less than the average at this time last year.

What’s more, analysts are saying that prices will keep on dropping in the weeks and months ahead. “Expectations that the global oil market will remain oversupplied in the near term are keeping downward pressure on the price of crude,” AAA stated on Monday. That downward pressure on crude prices is likely to translate to increasingly cheaper retail prices at the pump.

“Barring any major shake-up in the global picture and unexpected refinery problems, GasBuddy expects that the national average will continue dropping into Labor Day and stand some 10-15 cents lower than it stands today,” a GasBuddy post explained.

Such a drop would put the national average at $2.45, maybe $2.40. And prices in many states could dip below $2 per gallon, which was fairly commonplace in early 2015.

In fact, Tom Kloza of the Oil Price Information Service told CNN Money this week that perhaps 50 gas stations around the country are currently charging under $2 per gallon. And Kloza predicted that by the time we’re into the NFL season this autumn, “There will be thousands, even tens of thousands of stations below $2.”

MONEY Gas prices

5 Places Where Gas Prices Are Plummeting

gas prices at chevron gas station
Mike Blake—Reuters/Newscom

Prices have dropped at least 10¢ in one week's time.

Nationwide, the price of gasoline keeps inching lower. According to the AAA Fuel Gauge Report, the average of a gallon of regular was $2.710 as of Monday, nearly a nickel less than the average one week ago ($2.756).

“All but seven states in the U.S. saw a drop in gasoline prices over the last week,” the researchers at the gas price-tracking site GasBuddy.com noted on Monday. More importantly, the trend for lower and lower gas prices is one that’s expected to stick around for months: “It would appear that the latter half of the summer will bring cheaper gas prices than the first half while this autumn is shaping up to give this past winter a run for its money in terms of cheap gas prices.”

Drivers in some parts of the country are the beneficiaries of a particularly pronounced price break lately. Here are five places where average prices have dropped by 10¢ or more over the past week.

Southern California: Mercifully, gas prices in Los Angeles and Orange counties decreased for nine straight days recently, together lowering the average price of a gallon of regular by about 12¢, according to the (Los Angeles) Daily News. The price dip followed an extraordinarily painful period for drivers, who watched prices at the pump spike by more than 50¢ in a single week, hitting more than $4.50 per gallon at gas stations in places like Beverly Hills and downtown Los Angeles.

Statewide, the average price for a gallon of regular as of Monday is $3.83, the highest in the country and over $1.10 more than the nationwide average, per AAA data. Still, analysts say California gas prices should drop regularly in the days and weeks ahead, as the supply has improved substantially.

Ohio: Prices at the pump have dropped dropped 17¢ per gallon, on average, in one week. The current average statewide is now $2.46 for a gallon of regular.

Kentucky: Prices dropped 12¢ in one week, according to GasBuddy, and now average $2.50 per gallon.

Indiana: The current average is $2.44 for a gallon of regular, representing a decrease of 11¢ over the past week.

Michigan: Average prices dropped by about 10¢ per gallon over the last week in Michigan, where prices at the pump have also decreased by at least 10¢ in each of the past three weeks.

MONEY Gas prices

Gas Prices Are Freakishly Expensive in This Part of the Country

Gas prices at a Chevron station in Los Angeles, California
Lucy Nicholson—Reuters/Corbis Gas prices at a Chevron station in Los Angeles, California

Prices spiked more than 50¢ in less than a week.

No wonder why California is leading the way in terms of adopting electric cars and buying fuel-efficient hybrids like the Toyota Prius: Gas prices here are far higher compared with the rest of the country, so it makes sense for California drivers to gravitate to vehicles with lower fuel costs.

Lately, gas prices in California are especially out of whack with the rest of the nation. In San Diego, for instance, the average gallon of regular was selling for $3.50 last Wednesday and spiked to over $4 per gallon by Monday. Prices have increased just as dramatically and quickly in Los Angeles and Orange counties too. During the same period, gas prices nationally have been essentially flat, averaging about $2.77.

Tight supplies, thanks partly to diminished production due to repairs and maintenance at refineries, are being blamed for a 70¢ jump in the wholesale price of gasoline. That jump has translated to a quick spike in retail prices at the pump. And drivers are likely to see even higher prices in the near future, as price increases at the wholesale level are routinely passed along to consumers.

“Retail prices are up 50 cents in Los Angeles and the Orange County region,” Gordon Schremp, a senior fuels specialist at the California Energy Commission, said to the San Diego Union-Tribune. “That’s not the full 70 cents, so there is probably some additional room to go up a little bit more.”

According to AAA, the average statewide in California increased 28¢ per gallon over the past week, including a 22¢ spike just since last Friday. At the same time, drivers in many other states have been the beneficiaries of price decreases at gas stations: Average per-gallon prices in Indiana and Michigan, for instance, were down more than 10¢ in a week’s time.

“This is a complete disconnect with the rest of the country,” Tom Kloza, global head of energy analysis for the Oil Price Information Service, explained to the Los Angeles Times. “This really is illustrative of the fact that California is its own market.”

California gas is subject to especially high local taxes and fees (which add on about 70¢ per gallon), and state rules require that only special low-pollution blends of fuel are used. As a result, California gas stations can only get fuel from a select few refineries. And when demand increases quickly or there are production issues that slow the local supply, California gas prices—which are high compared to the rest of the country to begin with—hit the roof.

Hence current prices ranging from $4.50 to $4.99 per gallon at some gas stations in Beverly Hills and downtown Los Angeles. And hence the outrage of California drivers, who understandably feel like they’ve been getting gouged for months by what they see as opportunistic refineries inflating prices far higher than what’s reasonable.

MONEY Gas

More Low Gas Prices Could Be Coming

A new global forecast illustrates the old law of supply and demand.

MONEY deals

Summer Price Break! 6 Things That Are Actually Cheaper This Summer

Blessedly, bacon and cheese are on the list.

For the most part, consumers are accustomed to seeing prices for a wide range of goods go in only one direction: up, up, and up. Often, this is simply the result of inflation and regular price increases. There are also freak price spikes like the current situation with eggs, which have risen dramatically of late thanks to the bird flu outbreak. And more costly eggs have in turn begun causing price increases everywhere from diners to bakeries.

Thankfully, from time to time consumers get to benefit from the occasional price decrease on goods and services—including some of their favorite treats. Here are a half-dozen things you’ll actually pay less for this summer.

  • Bacon

    Plate of bacon
    Alamy

    While bacon prices aren’t cheap by historical standards, they are significantly cheaper than in the summer of 2014, when they spiked amid low supplies. According to the Bureau of Labor Statistics, the average price for a pound of bacon as of May 2015 was below $5, compared with $5.50 at the start of 2015 and more than $6 last summer. Overall, bacon prices fell 18% over a 12-month span.

  • Gas

    gas prices
    Elise Amendola—AP

    After surging steadily through much of the spring, gas prices have dipped of late, hitting a national average of $2.77 for a gallon of regular at the start of the week, according to AAA. Drivers in nearly all states are paying at least 75¢ less per gallon compared with a year ago, and AAA estimates that cheap gas prices in 2015 have helped Americans collectively save $65 billion on fuel costs thus far this year.

  • Last-Minute Hotels

    Luxury Hotels on the Las Vegas Strip
    John Kellerman—Alamy The Las Vegas Strip

    Overall, hotel rates in the U.S. are expected to be up 5% to 6% in 2015, and in some cases are up more than 10%. But in certain cities and under specific circumstances, prices can be much cheaper compared with this time last year. Data from the last-minute hotel booking specialist HotelTonight indicates that some Fourth of July weekend rates booked right now are bargains compared with the 2014 holiday. Average rates in Las Vegas are 39% cheaper versus last year, and July 4 hotel prices are also down in destinations such as the Berkshires (down 29%), Tampa (20%), and Williamsburg, Va. (12%).

  • Other Pork Products

    sausages on grill
    Slawomir Purgal—Alamy

    The same rise in the nation’s pork supply that’s caused bacon prices to retreat is lowering prices for pork chops, hot dogs, and the like. The American Farm Bureau Federation recently estimated that the cost of a typical July 4 cookout that feeds 10 people is 3% cheaper than it was a year ago. One of the reasons why this is so is that two of the main dishes—hot dogs and pork spare ribs—are 2% to 4% less expensive than they were in 2014.

  • Airfare

    plane flying over field
    iStock

    At the start of the year, researchers from the likes of Expedia predicted that flight prices would fall in 2015, if for no other reason than airlines would finally have to lower fares in the face of dramatically cheaper fuel prices. And while airfare prices depend on a range of factors—route, timing, demand, etc.—data from the flight search Hopper.com show that overall, domestic flights in the spring and early summer were 8.7% cheaper compared with the same time last year. The site also predicted that the trend will continue through the summer, with the average flight selling for $18 (or about 6%) less than in the summer of 2014.

  • Dairy Products

    Vitamin Cottage Natural Grocers, Denver, Colorado
    Brennan Linsley—AP

    The USDA reports that national stockpiles of butter, cheese, and milk are all up significantly compared with a year ago, and prices for most dairy products—including yogurt, ice cream, and blocks of cheese—are down as a result. Bear in mind that some of the price decrease is based on how expensive dairy products were for much of last year. Butter consumption, for instance, has been increasing for years, and prices spiked to near record prices last summer through the fall.

TIME portfolio

Documenting the Hard Life in Russia’s Frozen Arctic

“The Arctic is like a blank sheet on which you could see all the tensions of Russia played out."

The Soviet Union was known for its doublespeak, but when Moscow bureaucrats called the 7,000-km area of the Russian Arctic the “zone of absolute discomfort,” they were speaking the truth. Temperatures in the settlements of the far north, which spans from Alaska to Finland, can dip below –45°C in the winter. Living conditions are wretched, which is one reason Stalin used these towns as gulags. Descendants of some of the prisoners still live in these Arctic communities. Among the people who seem adapted to the conditions are the indigenous herders known as Nenets, who live in tents called chums.

Yet there are billions of tons of oil and natural gas locked beneath the permafrost—a fact that has drawn a new wave of workers to the Arctic, as the photographer Justin Jin documents. It’s not an easy place to work as a photographer—Jin once got frostbite from the cold metal of his camera pressed against his face—but the material is worth it. “The Arctic is like a blank sheet on which you could see all the tensions of Russia played out,” says Jin, who has worked in Russia for years. “You have the extreme expanse of space, the endless nature, the riches trapped in the tundra. It’s all the contradictions and juxtapositions of Russia.”

Justin Jin is a documentary photographer based in Belgium.

Bryan Walsh is TIME’s Foreign Editor.

MONEY Autos

The Case for Buying an Electric Car Is About to Get a Whole Lot Better

2015 Chevrolet Bolt EV
Luke Ray—Fuel Press Chevrolet Bolt EV Concept all electric vehicle with more than 200 miles of range and a price tag around $30,000.

Drive 200+ miles on a single charge, without paying Tesla prices.

Electric car sales have stagnated through the first half of 2015. Sales have slumped for several reasons, including cheap gas prices and increased fuel efficiency among gas-powered automobiles.

In May, dramatic price cuts helped boost sales of models such as the Chevy Volt, and the month saw the most EV sales of 2015, according to InsideEVs. Still, the May 2015 EV sales total of 11,540 was 7% lower than May 2014. The Nissan Leaf, the overall electric-car category leader, has been struggling in particular. After failing to cross 2,000 unit sales in any month in 2015, the Leaf finally hit the mark in May. But through the first five months of the year, only 7,742 Nissan Leafs have been purchased, a decrease of more than 25% off last year’s pace.

Over the next few years, however, advances in electric car technology could very well turn skeptics into plug-in adopters.

While purchase prices have decreased, EVs remain impractical for many households for the time being. Presumably, a large portion of drivers is reluctant to go electric because of limited driving range. Unless you’re willing to pay $70,000 or more for the likes of a Tesla, you’ll be limited to driving 70 or 80 miles per charge with the Leaf and nearly every other reasonably priced purely battery-powered vehicle. That’s just not enough for drivers who want a car that’ll be worry-free on road trips, longer commutes, and long days full of running errands.

Soon, though, the so-called “range anxiety” factor could be reduced significantly. Earlier this year, GM introduced a concept called the Chevy Bolt, an all-electric vehicle that should appeal to the masses seeing as it’s expected to be both affordable (around $30,000) and practical (200 miles per charge).

Chevy hasn’t said when, exactly, the Bolt will be available for purchase, but it’s been widely reported that the likely date is sometime in 2017—probably late 2017. According to industry analysts cited by Automotive News, buyers could be behind the wheel of Bolts sooner than that. Production of the Bolt is expected to begin in October 2016, and sales would commence shortly thereafter.

By then, there could be even more compelling reasons to wait a little longer for what Nissan has in the works for the Leaf. Another Automotive News post notes that Nissan is working on a next-generation battery that would allow the Leaf a driving range of roughly 310 miles per charge. Such an impressive range won’t be available in the forthcoming 2017 Nissan Leaf, which should hit the market next year with an expected range of 105 to 120 miles.

What’s more, next year Tesla, which thus far has focused on the high-end market, is expected to introduce the Model 3, a mass-market vehicle rumored to have an impressive driving range and starting price ($35,000) that could come to dominate the field.

Overall, one or more of these new vehicles could be real game changers, with affordable prices and vastly improved driving ranges that’ll make the best arguments yet for switching to an EV.

Read next: Cheap Gas Helps Pull the Plug on Electric Cars

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