The cost of filling up your vehicle’s gas tank continues to go up. In Massachusetts, motorists are paying an average of $3.73 per gallon for regular fuel, a 3-cent increase over last week, and a 28-cent jump over the past month. Energy analysts like Mike Lynch say the current price spike reflects an increase in the global price of crude oil. Lynch, a petroleum market consultant based in Amherst, says that’s due in turn, to a combination of factors. Among them are continuing sanctions against Iran that have cut oil exports by a million barrels a day, and commodity traders being bullish on the state of the US economy.
“The traders in New York look at the possibility of economic recovery and think that that’s going to tighten the market. And so they’ve bid up the crude oil price quite a bit. Second to that is some refinery troubles on the east coast and the Midwest that have just tightened some local markets.”
Like the shutdown of a New Jersey refinery, which is expected to cut gasoline supplies to New England by 7½%, driving prices even higher, according to Aaron Kupek, a spokesman for AAA’s Allied Group in Connecticut. The average there stands at $3.96/gallon, the fourth highest in the country. Kupek says he won’t be surprised to see regular gas eclipse the $4.00 mark in the very near future.
“When you move into the spring, you might see some moderation and some leveling off of the prices. And then, of course, you’re heading into the busy summer travel season where you have more of a demand for gasoline. And at least here in Connecticut, come July 1st, you’re going to see that increase in the gross receipts tax which, if you look at current prices, would add another four cents a gallon to the price of gasoline.”
Kupek says motorists will probably have to resign themselves to seeing $4.00/gallon gas become the new normal. But analyst Mike Lynch says prices have spiked before only to drop significantly, and calls the prospect of $4.00 gasoline as the new normal “slightly better than a ranked guess”.