Dips in Northern California gas prices may barely last into 2023, experts say

Santa Rosa fuel prices have been dropping about 10 cents per day, lately. Experts say those decreases are larger than in other parts of the country due to California’s high prices.|

Sonoma County’s downward trend in gasoline prices is likely to continue into 2023, but experts caution that continued decline probably won’t continue beyond the first month of the year.

Barring an economic recession, experts believe, California’s fuel prices could bottom out at $3.50 per gallon of regular unleaded fuel. If that were to happen, though, the only place where that would seem like a deal is here since the Golden State’s gas prices remain some of the highest in the nation.

Recently, Santa Rosa gas prices have been dropping about 10 cents per day because California’s high gas prices leave more room for movement, said Patrick De Haan, head of petroleum analysis for Gas Buddy.

He told The Press Democrat that prices will continue to fail over the next few weeks, but by smaller amounts.

“One can only hope, but all good things come to an end,” De Haan said, referring to his outlook on what motorists can expect. “The good news for California is you still probably have a decent way to go.”

On Monday, Santa Rosa gas prices hit a low of $4.05 per gallon, according to Gas Buddy, which tracks fuel costs across the country.

That translates to a city average of $4.50 per gallon, according to AAA. Exactly one year ago, the average was $4.82 per gallon.

The state average on Monday was $4.37 per gallon and the national average was $3.14 per gallon, AAA reported.

On Dec. 14, gas sold for $4.15 per gallon at Speedway Express on College Avenue, where Rohnert Park resident Randy Austin yearned for lower prices.

The 28-year-old acknowledged that prices were moving in the right direction, but he said $4.15 was still a lot of money to fill his Mazda6.

“I’m waiting for something cheaper, like a gallon for $3,” Austin said. “That’s about when I’ll be comfortable filling up. Now, I put in little by little and still watch how much I drive.”

Severin Borenstein, a UC Berkeley energy economist, said worldwide issues, coupled with regional ones such as refinery maintenance, create “a huge amount of uncertainty” about gas prices heading into 2023.

“I think it is unlikely that we would see sub-$3 gasoline,” he told The Press Democrat. “But it could happen, particularly if there is a major recession worldwide. If the U.S. and world economy holds up reasonably well, I think oil prices will not drop sufficiently.”

This year’s surge in fuel prices began in March with the onset of the war between Russia and Ukraine, which experts blame for affecting worldwide oil supplies.

Prices rebounded toward the end of the summer, but started rising again in September after refinery shutdowns triggered by maintenance or problems with the power supplies affected West Coast oil supplies. The issues, though were resolved in October and gas prices began falling again, albeit from high levels.

De Haan said the Russia-Ukraine war remains a factor in oil and fuel costs but it’s been offset by other happenings, like COVID-19 lockdowns in China where fuel demand has dropped.

“If they reopen their economy, they’re more likely to get out more and more, which will create demand,” De Haan said.

AAA announced nearly 15 million Californians are expected to travel for the holidays and they will produce heavy traffic. De Haan, however, said that is unlikely to force fuel prices to rise.

“That’s a myth that’s never come close to being busted,” he said.

You can reach Staff Writer Colin Atagi at colin.atagi@pressdemocrat.com. On Twitter @colin_atagi

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