As national average nears $4, here’s how close gas prices are to 2022 records

National average for regular gasoline is $3.977 per gallon, $0.023 shy of $4 and well below the U.S. peak of $5.016 in June 2022. California is highest at $5.822/gal; Washington ($5.291) and Hawaii ($5.280) are the only other states above $5, 15 states are within $1 of their 2022 records, and Iowa is furthest below its record at $3.312 (~$1.45 under its $4.761 peak). Prices are at least ~$0.60 higher than on March 1 in every state, with Iowa up $0.675 month-to-date, while seven states saw slight declines since Sunday (Georgia down $0.044).

Analysis

Regional concentration of near-record prices (West Coast + island states) is a supply/regulatory story, not demand-driven: CARB blends, higher state taxes, and limited transcontinental pipeline/tanker flows create a persistent West Coast premium that can exceed $0.50–$1.00/gal vs the national market for weeks at a time. That premium mechanically boosts local wholesale margins (refining/marketing) while transferring cost to marginal consumers and freight-intensive businesses in those states, insulating national refiners from a uniform margin lift.

Short-run gasoline demand is highly inelastic, so a $0.02–$0.08/gal move at the national level will not meaningfully compress volumes over days-to-weeks; however, the distributional effect matters — a $0.10/gal increase equates to roughly $48/vehicle/year, concentrating pain on lower‑income households and small businesses that lack fuel hedges. Expect measurable revenue pressure in discretionary retail and local transport services in high-price states within 4–12 weeks even if national gallonage holds.

Key catalysts that will determine direction over the next 6–12 weeks are (1) West Coast refinery utilization through spring turnarounds, (2) pace of inbound product imports (VLCC/Panamax scheduling), and (3) directional crude and RBOB crack spreads. A swift crude sell-off or targeted SPR/product release could erase the move in 2–6 weeks; conversely, refinery outages or hurricane disruptions could widen regional spreads for months, sustaining elevated gasoline pump prices and regional margin asymmetries.

Key Decisions for Investors

• Buy a 6–12 week seasonal call spread on RBOB futures (or UGA-equivalent call spread) to capture a typical late-May to July crack expansion; target 30–60% upside, risk limited to option premium. Exit or trim if RBOB crack < $10/bbl or West Coast stocks > 30 days supply.
• Long PBF (PBF) or VLO equity for 3–6 months to monetize potential widening gasoline cracks and marketing income on the West/Midcontinent complex; position size 2–4% portfolio, take profits if crack compression > $5/bbl reversal or Brent drops > 12% from current levels.
• Pair trade: long PBF (refiner) / short XRT (retail ETF) for 3 months to isolate energy-margin capture vs discretionary demand risk. Expect asymmetric payoff if cracks widen; stop-loss if both PBF and crack spread fall >15%.
• Maintain a tactical hedge for portfolio exposure to consumption shock: buy 1–3 month puts on regionally exposed consumer names (high same‑store exposure to CA/WA/HI) or underweight small-cap discretionary for the next 8–12 weeks — downside if pump prices climb another $0.10–$0.25 regionally.