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Gas Prices Back On The Rise

Photo via Flickr//Richard Masoner

  Sub $2 per gallon gasoline appears to be a thing of the recent past, with prices jumping more than a dime last week across the Southeast. 

Self-serve regular in Pensacola averages $2.18 a gallon, according to AAA. That’s up a dime from last week, but $1.10 lower than a year ago. Much of the increase is seasonal.

“Oil refineries are now switching over to that ‘summer blend fuel,’” said Mark Jenkins at AAA South in Tampa. “They undergo seasonal maintenance on the machinery, and switching over to that more expensive gasoline. Thus, not putting out as much gasoline during this time.”

Crude oil prices traded as high as $53.16 before closing Friday at $51.69 on the New York Mercantile Exchange. That’s $3.45 higher than the week before. Oil prices are still 52% cheaper than the peak price last year. The Energy Information Administration projects oil prices to average around $60 per barrel this year, more than $30 cheaper than the average in 2014.

Among Florida’s metro areas, Tampa-St. Petersburg has the lowest self-serve regular, at $2.09 per gallon. Florida’s average rose 13 cents a gallon last week, the national figure just a penny behind. Jenkins says another factor at the refinery is the continued production of heating oil, as the northeast continues to be battered by winter storms.

Barring a major disruption in supply or refinery operations – such as a hurricane in the Gulf of Mexico – Jenkins doesn’t expect prices at the pump to skyrocket beyond about 30-50 cents per gallon between now and mid-spring.

“Beyond that, we’re not expecting gas prices to reach $3.00 a gallon this year,” Jenkins said. “The EIA has a forecast of gas prices being around $2.60. That’s with oil averaging about $63 a barrel. Now, if oil surges, if it jumps much higher than that, then we could see gas prices do the same thing.”

Heading towards spring break and the summer driving season, the lower gas prices are translating to less money in the tank, and more in the pocket. A study by the firm Nielsen Holdings shows the average American saving about $70/month.

Another factor for rising prices appears to be the largest oil refinery work stoppage since 1980. Members of the United Steelworkers Union walked out of 11 refineries in a half-dozen states a week ago. Labor talks are now in recess.