The price at the gas pump, a staple of the spring season, is rearing its ugly head in the winter. In April of 2012, the national average of a gallon of gas reached an all-time high of $3.94. It looks like not only Philadelphia, but other major regions in the U.S. will be looking at higher gas prices by spring. As of February 2nd, the average of the Philadelphia region and surrounding counties was $3.58 per gallon, with some counties seeing as high as $3.67. In Pennsylvania’s neighboring states, New Jersey, Delaware and Maryland, the price at the pump is about 11 cents cheaper.
It is not just here in Pennsylvania where gas prices have people, especially commuters, worried. The highest gas prices in the nation belong to Alaska, California, Connecticut, New York, and Hawaii. Naturally, because of its remote location, Hawaii has the highest gas price in the nation at $4.11. Parts of Los Angeles have experienced $5.00 per gallon this year. According to the Energy Information Administration, oil prices have increased 10% in January and February, with the price of crude oil being 68% of the cost of a gallon of gas.
With the U.S. economy slowly strengthening, which includes improvement in job growth and the housing market, an an increase in the price of crude oil follows. The price per barrel of crude oil was $97.54 in early February, and may reach $100 this year. Pump prices have risen not only because of the rising cost of crude oil, but U.S. refineries shutting down across the nation has contributed. Shutting down refineries is not uncommon, as many refineries in the nation close for winter maintenance to prepare for the summer season. Closing for maintenance puts a strain on the production of gasoline, not to mention, the permanent closing of refineries, such as the Hess refinery in New Jersey in January. The Hess refinery was responsible for about 7.5% of the Northeast’s gas production.
Tom Kloza, the chief oil analyst for the Oil Price Information Service, says that motorists should not fear the high price of gas set by last year’s record of nearly $4.00, predicting that pump prices will “top out somewhere between $3.50 a gallon and $3.90 a gallon this year.” Although the nation may not be looking at 2012’s high average of $3.94, there is no question that rising gas prices affect consumer spending, as Americans will tailor their spending and travelling distance around how much they pay at the pump every week.
Sources:
CNN Money
Delco Times
NPR