Gas prices have been yo-yoing up and down this year and today for the first time this summer, North Carolina drivers are paying more for a gallon of gas than on the same date last year, according to AAA Carolinas on Wednesday.
“The outlook for the next few weeks is grim,” said David E. Parsons, president and CEO of AAA Carolinas. “In prior years this was a time when prices started downward, but speculation in oil futures is driving the price up every day. The outlook for a fall price decline is bleak at this time.”
Angela Daley, spokesperson for AAA Carolinas, said North Carolina gas prices peaked in April at $3.91 per gallon and fell to a year low of $3.18 a gallon on July 4.
“The average cost of a gallon of gas in North Carolina has climbed 45 cents to $3.63, higher than the year-ago price of $3.61,” said Daley.
Since spring, North Carolina motorists have paid up to 37 cents a gallon less than on the same date in 2011.
Earlier this year, prices peaked at $3.91 on April 6 and fell steadily until July 5, when prices started trending upward.
Last year, gas prices fell 13 cents during the month of August, from $3.70 to $3.57, she said.
“So far this August, the price of gas has jumped 21 cents from $3.42 Aug. 1 to $3.63 today. The price for a barrel of crude oil has increased from $78 at the end of June to $93 today,” said Daley.
Daley said factors increasing the price of gas upward (and encouraging oil price speculation) include Saber-rattling in the Middle East, with Iran’s threats to interfere with oil distribution through the Strait of Hormuz — where more than a third of seaborne crude oil passes through — causing concern over disruption in supply.
She said the prediction of a higher-than-average number of hurricanes for the remainder of the hurricane season, which peaks from mid-August to the end of October, also could be a cost-driving factor.
She said positive news like the potential for an economic recovery, both in the U.S. and abroad, tends to increase demand.
She said since ethanol composes about 10 percent of regular gasoline, the Midwest drought has caused the price of ethanol to spike.
The national average for a gallon of gas is $3.71; a year ago, it was $3.59, Daley said.
Currently, North Carolina’s gas price is the 27th most expensive in the contiguous United States. North Carolina’s combined state and federal gas tax is 57.6 cents, whereas its northern neighbor Virginia has a combined tax of 38.6 cents, which is 19 cents cheaper. Those living in this area sometimes drive the extra distance to save money on a fill-up because of the savings. On Wednesday, a gallon of gas just across the line in Virginia was $3.49 at the Cana Exxon, but gas was 10 cents higher at the Exxon on West Lebanon Street just a few miles away.
According to www.northcarolinagasprices.com, in the greater Mount Airy area, the Busy Bee and Jack’s Grocery on Westfield Road had the lowest prices on gas Wednesday at $3.49 a gallon each. Most places were selling gas for $3.55, the website reported.
At Sheetz, Executive Vice President of Operations Travis Sheetz said right now the cost of gas is not rising because of a lack of supply, but rather because oil futures are being more heavily traded.
He said if a hurricane knocks any refineries offline in the gulf, that’s when the price of gas becomes a supply issue.
While gas tends to be higher during the summer driving months, the price typically goes down after Labor Day, he said.
Sheetz said the company’s customers don’t seem to mind the price of gas until it gets out of the $3 range.
“As American consumers, we become numb to it until it goes over $4 a gallon,” said Sheetz.
Marty Brannock, owner of Brannock’s Exxon on Lebanon Street, said he had figured that the fires out west or the drought that is killing corn crops is to blame.
“We are just trying to maintain,” said Brannock.
He said he makes 4 cents a gallon profit on gas, but by the time he pays for pump maintenance and electricity, gas is not what is keeping his business going.
Brannock’s Exxon is the only one of the original 22 gas stations that once dotted the roadsides in Mount Airy. He said he sells gas as a convenience for his customers, but oil changes, repairs on vehicles, selling tires and providing state inspections is what really keeps him afloat.
Even though prices are continuing to rise, he said as long as everyone has to get around, they are going to continue buying gas.
Reach Mondee Tilley at email@example.com or at 719-1930.