Advice to drivers: That sudden jump in gas prices is not the last of the bad news, so fill ‘er up.
Efforts to cut global oil production, led by Saudi Arabia and Russia, have pushed up petroleum prices around the world, and since oil is the base product refined to make gasoline, those prices have rippled through the market to move pump prices higher.
Combined with an end to the U.S. government’s release of oil from the nation’s strategic reserve, the production cuts have squeezed supply just as the summer demand for gasoline is peaking, said Patrick DeHaan, senior petroleum analyst at Gas Buddy, which tracks gasoline prices nationally.
The trajectory is clear, he said. “Sooner rather than later, you should look to fill your tank. Prices are rapidly changing.”
By which he means: rising.
The average price of a gallon in metro Atlanta at midday Friday was $3.56, a stunning 34-cent climb in a month that included a 20-cents-per-gallon rise in just the past week.
And that is not the end of the escalation.
State and federal taxes add about 50 cents to the cost of each gallon. And while pump prices are often used as political ammunition, oil prices account for at least half the price drivers pay at the pump. And the global price of oil is now higher than it has been since early April. The price for oil, set in commodity trading, peaked at more than $84 a barrel of oil mid-Friday, before retreating below $80.
Oil prices are part of the cost factored through the refining and distribution process and eventually to the pump. And as the higher-priced gas hits retailers, they can very rapidly adjust their prices.
In this case, upwards.
That’s already started to happen and the flow of increases is not nearly finished, DeHaan said. “Many retailers are quite a bit far behind in passing along the recent surge in the price of gas.”
While oil prices are the main factor, issues at refineries and in pipelines can have a huge impact on the price — or even the availability — of gasoline.
Metro Atlanta drivers rely on pipelines that carry gas from refineries along the Gulf Coast, mainly in Louisiana, Mississippi and Texas. When hurricanes have shuttered those refineries or interfered with pipeline operations, Atlanta has seen prices spike and — occasionally — experienced shortages.
“The Colonial pipeline and the refineries that feed it are the primary worries for Atlanta,” DeHaan said.
While electric vehicles are increasingly popular and worries concerns about climate change make burning fossil fuel a rising concern, American drivers are still overwhelmingly heeding the lyrics of the old NRBQ song: “Get that gasoline.”
With school openings on the horizon and many families hitting the road for vacations, demand for gasoline is near its summer peak.
The nation uses about 9 million barrels of gasoline each day, according to the Energy Information Administration.
The last time prices were this high was nearly a year ago and those prices seemed like a discount.
A year ago, in the market turmoil following the Russian invasion of Ukraine, metro Atlanta gasoline averaged $3.86 a gallon after peaking last June at $4.54 a gallon. Prices slid slowly through the rest of the summer, hitting $3.56 — Friday’s level —in late August on the way down to a low of $2.70 a gallon in early winter, according to Gas Buddy.
In metro Atlanta, the lowest price being reported at midday Friday by Gas Buddy was an Exxon in Conyers priced at $3.09 a gallon for purchases in cash.
Two stations — a BP and Shell in Atlanta — were the highest prices reported, both more than $4 a gallon.
Georgia’s costliest county for gas late this week was Emanuel County, which averaged $3.69 a gallon, according to AAA. The cheapest gasoline in Georgia was in Quitman County, where gas averaged $3.20 a gallon.
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