Several factors fueling rise in gasoline prices statewide
Pennsylvania hit a peak on July 16, 2008. A gallon of regular unleaded gasoline averaged $4.074 across the commonwealth that day, a state record.
That high watermark (petroleum mark?) has not been eclipsed in the 11 years since.
It isn鈥檛 likely to happen in 2019, Jim Garrity acknowledged, although he believes in the bromide 鈥淣ever Say Never.鈥� Garrity, a gas guru among other things with AAA East Central, does not dismiss the possibility of hitting $4.08 or above, but says flat out: 鈥淭here鈥檚 nothing indicating that we鈥檒l get close to that.鈥�
Nervous motorists throughout Penns Woods will be semi-relieved to read that, but remain wary nonetheless. Since early January, they have seen prices rise virtually on a weekly basis.
Travelers in and around Washington have reluctantly watched the cost at the pump jump 65.5 cents from Jan. 8 through last week, when the local average hit $3.066. The Western Pennsylvania region has experienced a 65.7-cent bump over that four-month period to $3.103.
And this is happening nationwide. The average price in the U.S. has soared from $2.24 to $2.89 since the beginning of the year 鈥� that familiar 65 cents. California鈥檚 per-gallon average topped $4 last week and, according to a report in USA Today, a few stations were charging $5-plus.
Garrity, officially the public and legislative affairs manager at East Liberty-based AAA, said there have been several reasons for the continuing pricing ascent: the transition from winter blend gasoline to the pricier summer blend, which occurred a few weeks ago; the rising global cost of crude oil; tighter gas inventories; and proximity 鈥� or lack of proximity 鈥� to distributors.
There, of course, is another element at play in the Keystone State. Pennsylvania鈥檚 fuel tax is 57.6 percent 鈥� more than 57 cents per dollar of petrol. That is the highest rate among any state, by far, Garrity said. Washington state, the runner-up, is at 49.4; California (47.7 percent) is third.
Each state pays a federal tax of 18.4 cents per gallon.
There is a measure of optimism, though. 鈥淢otorists,鈥� according to Garrity, 鈥渃an expect gasoline to remain relatively calm (price-wise) the rest of the month.鈥�
Denton Cinquegrana echoed that evaluation.
鈥淚 don鈥檛 know if you can sound the 鈥榓ll-clear鈥� bell, but prices look like they may have peaked in the short term. If not, they鈥檙e close,鈥� said Cinquegrana, chief oil analyst for Oil Price Information Service, a Wall, N.J.-based company that provides pricing on gasoline, fuels and other oil and gas products for global suppliers.
Short term is the operative term here. Memorial Day weekend is the traditional kickoff to the summer driving season, and the traditional time when pump costs increase. More people are vacationing, resulting in lower gas inventories 鈥� demand outstripping supply. And don鈥檛 forget that summer blend.
鈥淢emorial Day almost sets the tone for the summer,鈥� Garrity said. 鈥淚f travel is anything like it鈥檚 been, it looks like we鈥檒l have a slight uptick in summer travel and another strong season for demand.鈥�
The summer blend, Garrity added, 鈥渋s probably one of the leading factors鈥� in midyear price jumps. This form of gasoline is costlier than its winter counterpart because its composition is different and because of increased demand. More motorists put in more miles during warm-weather months. And the closure of some refineries for maintenance may widen the supply-demand gap.
鈥淪witching from winter grade to summer grade is a major transition,鈥� Cinquegrana said.
These different blends certainly aren鈥檛 going away. 鈥淭hese gasolines react differently according to temperatures,鈥� Garrity said. 鈥淭here will be a summer and winter blend as long as we have summer and winter.鈥�
Crude prices also affect pump prices. Garrity said a barrel of crude cost $75 in mid-October, but hovered around $46 in January, when gasoline was cheap. Crude was at $62.10 on Thursday.
Distribution locations have a bearing as well, and eastern Pennsylvania has a large advantage over the west. Garrity said there are three refineries in the Philadelphia area and none in the western half of the state. 鈥淲e get the majority of our product from Ohio,鈥� he added.
A color-coded Pennsylvania map 鈥� on the AAA website gasprices.aaa.com/?state=PA 鈥� shows the discrepancy in pump prices. The cheapest gas is mostly in the counties east of Bedford, and the priciest fuel is generally found Bedford County and west.
Prices have, indeed, moderated in recent weeks, but the summer travel season is nigh. Easing on down the road may not be easy on the debit card over the next three months. Yet, according to Garrity, gas prices generally don鈥檛 dissuade vacationers.
鈥淧eople don鈥檛 cancel trips when gasoline gets expensive. They find other ways to make up for the cost.鈥�
He said there is another alternative as well.
鈥淭ake the more fuel-efficient vehicle.鈥�