Supply shortages pump up gas prices
The national average for gasoline inched up 2 cents in the past week. Typical spring factors like refinery maintenance, increasing demand and the switch to summer-blend fuel remain part of the story.
In the past seven days, the average price for a gallon of gasoline rose 5 cents in both Georgia and Tennessee. However, the most expensive prices in the southeast are found in Florida, where the average price is $3.63, 8 cents higher than the national average and 7 cents higher than last week.
“Florida motorists are seeing the highest gas prices since July,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “While Florida prices could continue inching up, they are still well below last year’s peak of $3.88 and not expected to reach $4.00 a gallon.”
Gas prices in Florida are increasing more than other states because of supply issues and strong demand. The Energy Information Administration states that gasoline consumption in Florida typically peaks in March, when seasonal population is high and spring break travelers and baseball fans arrive. This pattern differs from other states, where gasoline consumption typically peaks in July and August and is lowest during the winter months.
Florida supplies are tightening because of a change in supply, leaving it susceptible to shortages. According to the EIA, imports have dramatically declined during recent years, due to refinery closures in the Caribbean and limited shipments from refineries in the Gulf of Mexico, that would otherwise be able to offset the shortage. Now, anytime gasoline demand spikes, Florida must bid on shipments from the Atlantic basin to prevent a shortage.
Meanwhile, multiple factors continue putting upward pressure on oil prices, which influence about two-thirds the price of gasoline across the country. Consumer spending in the U.S. rose to the highest level in three months and continued conflict between Russia and the Ukraine heightens concerns of a supply disruption.
“Oil prices are expected to continue trending upward this week, which could mean more pennies per gallon at the pump,” said Jenkins.