Gas prices rise as temperatures drop at start of 2023: AAA

An unseasonably cold start to winter that forced refineries to temporarily shut down reversed weeks of gas price declines, according to AAA.

The national average cost for a gallon of gas rose to $3.22, 12 cents more than last week. 

Despite the increase, the national average gas price was down 22.5 cents from a month ago and 9.5 cents per gallon lower than a year ago, according to GasBuddy. 

"For the first time in two months, the nation's average price of gasoline rose sharply last week, as extremely cold weather led to many refinery issues, shutting down over a million barrels of refining capacity, pushing wholesale prices up," Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement. "…Some regions like the Rockies may see more price increases than others as cold-weather shutdowns hit the region fairly hard, with one refinery likely remaining down through the first quarter of 2023."

However, gas prices are likely to resume declining as refiners get back online, De Haan said.

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Gas prices to see less fluctuation in 2023

Gas costs may be less volatile this year compared to 2022, but motorists should still expect to pay high prices, according to GasBuddy's 2023 forecast.

The national average gas price for 2023 is expected to be $3.49 a gallon, nearly 50 cents less per gallon than the 2022 annual average price, GasBuddy predicted. However, prices could top $4 per gallon – and in some places, $7 per gallon – as the summer months approach. 

Americans are expected to spend around $470.8 billion on gasoline in 2023, a decrease of $55 billion from 2022, according to GasBuddy. Yearly household spending on gasoline is estimated to drop $277 to $2,471. 

"2023 is not going to be a cakewalk for motorists. It could be expensive," De Haan said. "Extreme amounts of volatility remain possible, but should become slightly more muted in the year ahead. 

"I don't think we've ever seen such an amount of volatility as we saw [in 2022], and that will be a trend that likely continues to lead to wider uncertainty over fuel prices going into 2023," DeHaan continued.

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High gas prices drive demand for EVs, survey says

Volatile gas prices have driven up interest in electric vehicles (EVs), a recent survey by Jerry, a car compare-and-buy service, said.

Saving money on gas is why 49% of U.S. drivers said they are interested in getting an EV as their next vehicle, up from 39% in 2021.  

Along with higher gas prices, drivers have also spent more on the cost of buying and maintaining a car, the survey said. Twenty-three percent of respondents spent more than 15% of their take-home pay on car payments and two-thirds said car ownership "forced them to cut spending in other areas in 2022," according to the survey. 

One area where drivers could save is auto insurance. Although the cost of insurance has risen along with other expenses, shopping for better rates could help bring down what drivers are spending, the survey said.

"One of the easiest ways to find savings on some of your larger car expenses, like insurance, is to shop around," Henry Hoenig, a data journalist at Jerry, said in a statement. "Our survey shows that more than half of Americans simply never do." 

If you're looking to lower your monthly auto costs, you can visit Credible to compare multiple car insurance providers at once and choose the one with the best rate for you.

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