Idahoans paid record gas prices in 2011

IDAHO - On an annual average basis, motorists paid more for gasoline in 2011 than in any prior year, even surpassing the watershed year of 2008 by 20 cents a gallon. That was the year Idaho and the U.S. set record annual prices of $3.29 and $3.25 with daily record prices of $4.16 and $4.11 respectively, according to AAA.

The Gem State's annual average price for 2011 was $3.49 a gallon, two cents lower than the $3.51 national average, but 54 cents higher than Idaho's average price a year ago. Americans spent approximately $481.3 billion on gasoline in 2011, easily eclipsing the $448 billion standing record from 2008.

"It was another strange year as Idaho prices ranged from as much as 20 cents lower than the national mark in February to 23 cents more than the national average in October," said AAA Idaho spokesman Dave Carlson. "In fact, the monthly average differential was at least 12 cents a gallon during eight of the past twelve months."

Gasoline prices typically take their cue from oil prices, which rose as high as about $114 a barrel in April, then dropped to $75.67 by October. But rising oil prices collided with dismal gasoline demand data for much of the year. When oil rebounded late in 2011, gasoline prices actually dropped, though not consistently.

In Idaho, for instance, pump prices tracked between $3.60 and $3.78 for seven months of the year, regardless of what was happening in the crude oil markets. A Wyoming refinery fire in early September likely cut already tight Intermountain region gas supplies, and by October 1, there was already a 30-cent differential between Idaho ($3.70) and U.S. ($3.40) average prices.

Idaho's average price for regular grade gasoline took a free fall in the last two months of the year, tumbling 47 cents and hitting $3.11 by year's end, a price motorists hadn't experienced since last February. The U.S. average price bottomed out during the third week of December at about $3.21. Since then, it has risen to an average price of $3.37.

AAA said today's average price in Idaho is $3.05, which is 32 cents lower than the $3.37 U.S. average.

"Another way of looking at the 2011 numbers is that an Idahoan who drove 12,000 miles in a vehicle that got 20 miles a gallon, paid $2,040 for gas last year, up $294 from the prior year," Carlson said.

Looking ahead in 2012

Despite the recent declines in Idaho gas prices in the past eight to ten weeks, current retail gasoline prices are at historic highs for this time of the year, AAA said. Oil and gasoline futures prices are similarly situated above where they were a year ago, which is likely a harbinger for this spring's gasoline prices.

For instance, oil is trading around $102 per barrel, compared to about $89 a year ago. Investors taking their cues from incredibly brisk demand growth from emerging economies, robust export demand, and

Iran's threats to close the Strait of Hormuz, may help send crude oil prices higher in 2012. Even the fear of disruption on global oil supply can push prices higher.

But if the economic stability of the European Union, global economic weakness and the associated decrease in demand prevail, there could be widespread swings in oil and gas prices similar to 2011. Last week's Department of Energy report showing stock builds for both crude oil and gasoline suggest there is a continued sluggish demand for gasoline.

"Call today's oil and gasoline futures prices tomorrow's head of steam," Carlson said, suggesting that spring rallies are regular and predictable. "Whether we're looking at emerging markets or the new investment money from speculators that tends to show up every spring, it's quite reasonable to assume we'll see sharply higher pump prices by April or May."

IDAHO AVG PRICES BY YEAR: 2006, $2.53; 2007, $2.83; 2008, $3.29, $2009, $2.35; 2010, $2.91; 2011, $3.49

U.S. AVG PRICES BY YEAR: 2006, $2.57; 2007, $2.79; 2008, $3.25; 2009, $2.35; 2010, $2.78; 2011, $3.51