Gasoline prices have been steadily increasing nationally amid higher crude-oil prices. This comes at a time when refineries are switching to cleaner-burning summer fuel blends.
The average cost for a gallon of regular in Atlantic and Cape May counties was $3.48 on Friday, 12 cents more than a month ago and 19 cents more than this time last year, according to AAA’s Daily Fuel Gauge report.
In the volatile world of petroleum pricing, multiple factors have been at play this past month — including the turmoil between Ukraine and Russia, the annual switch to a costlier blend of fuel, and even higher prices for the fuel additive ethanol, experts said.
“We always see prices go up much quicker than they come down. Although we are not expecting to see prices skyrocket, we are expecting this steady increase through Memorial Day, and hoping to see prices drop again,” said Tracy Noble, spokeswoman for AAA Mid Atlantic in New Jersey.
Noble said she does not expect prices to surpass $3.70 per gallon in New Jersey. The U.S. Energy Information Administration this month predicts a gallon of regular in the U.S. would cost $3.58 per gallon this summer, a penny less than last summer.
Gasoline typically costs more in summer than during the rest of the year — driven partially by increased demand from vacationers, as well as a federally required blend of cleaner-burning fuel that’s more expensive. But other factors also are at play.
Earlier this year, prices spiked for ethanol — a corn starch-based fuel additive — that is typically cheaper than gasoline, said Gregg Laskowski, senior petroleum analyst at GasBuddy.com.
Bloomberg reported in March that ethanol prices rose to their highest level in nearly eight years. That’s partially driven by backups on rail lines that transport ethanol.
Ethanol futures, tracked by Nasdaq, peaked in early April and have declined since. But they’re still higher than a year ago.
“In the early part of the year, the lower price of ethanol helped bring gasoline down. By mid-to-late March it did the opposite,” he said.
Gas retail prices can reflect conditions in New Jersey, in the U.S. or internationally, as well as the economy and commodity investors.
“Geopolitical events always have the potential to play a role. Right now we’re watching the Ukraine. … Last year we saw that when President Obama was talking about an attack on Syria. It came up in August and crude oil prices spiked as a result,” Laskowski said.
Besides affecting prices, the economy also can drive demand for gasoline.
“Depending on the strength of the domestic and global economies, that can increase demand,” he said. “If we see that increase, we’re likely going to see an increase in retail pricing.”
Overall, Laskowski predicted, Americans will pay about 10 cents less per gallon in 2014 than in 2013.
That equates to a $60 cost cut over 15,000 miles traveled at an average of 25 miles per gallon.
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