Gas prices are projected to rise by approximately $0.10 per gallon this summer due to decreased refinery capacity and increased refining costs, according to government data shared by Yahoo Finance. 

Increased Gas Prices

The Energy Information Administration (EIA) reports that US retail gasoline prices will average around $3.70 per gallon during the summer driving season, with the United States operating at 3% less refinery capacity than the 2019 peak.

Andy Lipow of Lipow Oil Associates noted that the refining industry has reduced its capacity by about 7% over recent years, citing aging refineries and the significant investment needed for equipment replacement. 

Despite a recent stabilization in gas prices following an April spike, VCPost reported that the national average stood at $3.60 per gallon on Thursday, May 16, up $0.40 since the start of the year. In the same report, experts estimate that gas prices will keep rising in the next few months despite inflation easing.

READ NEXT: US Banks to Increase Loans to Oil and Gas Companies as Europeans Reduce Theirs Over Climate Change Concerns

Why Gas Prices Will Keep Increasing

US crude oil futures have decreased by about 8% from its highest point in April. 

This decline is occurring as diplomatic efforts are being made to achieve a ceasefire between Israel and Hamas, which has likely reduced concerns about potential disruptions in oil supply from the Middle East. 

Analysts believe that the oil production alliance OPEC+ will likely extend its current production cuts beyond June. This will balance supply with demand, which can help maintain or increase oil prices if necessary.

READ MORE: Average Gas Price Hits $3.61 per Gallon and Will Keep Rising Despite Inflation Ease