Gas Prices on the Rise

By Erin Delmore

If you’ve paid the price at the pump lately, you might have noticed a five-cent per gallon spike just over the last week. It’s the third week in a row for rising gas prices.

“Really what you’re looking at is by the 4th of July — barring any weather or international things — we generally have settled on a price,” said Cathleen Lewis, director of government and public affairs for AAA Northeast.

The experts we spoke with said there are three main reasons for the increase. Demand goes up in the summer season, when people have more free time to drive around so the market matches the need. Then, gas stations switch from selling “winter blend” gasoline to “summer blend” — which is more expensive because of the components. And third, it takes time and money for the oil refineries to empty their reserves of the winter blend and replace it with the summer stock. That all gets wrapped into the price of purchase, too.

“So that means that the refineries have to shut down for a little while and clean out their tanks and then start the new blend. So that creates a part of that uptick,” said Lewis.

In the wintertime, gas burns differently than it does in the summer. The mix our cars can use and burn off safely in those cold months is cheaper to make, in part because it can use greater quantities of cheaper ingredients, like butane. But come the warm weather months, that mix is more volatile so our cars take “summer blend” gas, which uses more of the expensive ingredients. That’s one reason for the price increase.

“I always have to remind people New Jersey is still a really good bargain. We’re still significantly cheaper than New York, Pennsylvania and Connecticut and so that really does help make sure that we’re getting lots of out of state drivers and it keeps our prices down a little,” said Lewis.

One factor that might stabilize gas prices before you buckle up for that summer road trip: increased domestic production, which could offset fluctuations in the international market.

“We expect crude prices to be stable. Domestic United States production can help backfill any production cuts there might be and that we certainly see a much better, as a result of increased domestic production, we see a lower baseline gas price than we saw even without the gas tax,” said Executive Vice President of The Fuel Merchants Association of New Jersey Eric DeGesero.

Drivers might be taking extra note of the increase on the heels of the 23 cents a gallon gas tax hike signed into law late last year. But as Lewis points out, drivers will be seeing that money go to work in the spring and summer when long daylight hours and calmer weather give road repair crews a chance to get to work.