Drivers will find this summer's gas prices are lower than last year's, the result of a spike in crude oil production. Government forecasters say a gallon of regular gasoline will cost about $3.50 this summer — a slide of more than 10 cents from last year.
Energy Department analysts say that "the regular gasoline price will average $3.53 per gallon over the summer," citing lower crude oil prices. "The annual average regular gasoline retail price is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon in 2013 and to $3.39 per gallon in 2014."
As Danielle Karson reports for NPR's Newscast Desk, increased U.S. petroleum exports could keep domestic prices from taking a sharp dive, despite a slight slump in demand.
"U.S. refineries are also exporting a record amount of diesel and gasoline to developing countries, including China, where demand for diesel is through the roof," Diane reports.
Oil industry analyst Patrick deHaan tells Diane that if gas companies "build domestic inventories too much, it will hurt their bottom line. Maintaining exports while not allowing inventories to grow out of control, is what they're likely trying to accomplish."
Last Memorial Day, the U.S. average for a gallon of unleaded was $3.636 — "down about 15 cents" from 2011, CNN reported. But prices rose at the end of the summer, due in large part to Hurricane Isaac.
The International Monetary Fund recently urged governments to cut subsidies and allow higher gasoline prices, seeing it as a way to encompass the costs of increased traffic, pollution, and global warming, in addition to exploration, production, and transportation.
As David Wessel, economics editor of The Wall Street Journal, told NPR's Linda Wertheimer on Morning Edition, the IMF "says that subsidizing energy or mispricing it aggravates budget deficits, crowds out spending on health and education, discourages investment in energy, encourages excessive energy use, artificially promotes capital-intensive industries," and creates other problems.
"Some governments spend more on energy subsidies than they do on education and healthcare," David said. "And nobody really thinks that's a great idea."
But, he added, "David Lipton, the number two at the IMF .... says it's better to do this the right way than to do it right away, but it's important to do it."