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March 3 (UPI) -- Retail gasoline prices in the U.S. economy are holding steady relative to week-ago levels, but that's unlikely to last as refiners are now making a more-expensive, summer blend of gasoline. Travel club AAA listed a national average retail price of $3.39 for a gallon of regular unleaded gasoline for Friday, relatively unchanged from week-ago levels and 34 cents per gallon lower than this time last year.
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Lower prices, however, might not last the weekend. U.S. refineries are mandated to start making a summer-blend of gasoline no later than May 1.
"Summer-grade gasoline has a lower volatility than winter-grade gasoline to limit evaporative emissions that normally increase with warm weather and cause unhealthy ground-level ozone," the Energy Department explained.
The additional processing steps necessary for the summer-blend make gasoline more expensive. Retail gasoline prices increased from $2.63 per gallon during the last full week of February to $3.18 per gallon during the first week of September, when refiners can switch back to the winter grade.
This year would also be the first full-year without pandemic-related guidelines or restrictions, suggesting summer travel demand will be higher than year-ago levels.
Demand for now, however, looks suppressed. The amount of total refined products supplied to the market during the seven-day period ending Feb. 24, a proxy for demand, was 7.4% below year-ago levels. Gasoline product supplied is down 1.1% from this time last year.
That comes even as hiring in the U.S. economy remains robust, despite lingering inflationary pressures.
Only three states -- Texas, Missouri and Mississippi -- are posting a state average price below the $3 mark.
Future spikes, meanwhile, are unlikely to reach the $5 peak from last year. The Energy Department is forecasting an average price for the year at $3.39 per gallon, compared with $3.97 last year.
That forecast could be revised in Tuesday's updated outlook from the department.
