On Wednesday the current national average price for a gallon of regular self-serve gasoline is $3.92, reported the AAA Fuel Gauge Report. This price is three cents more expensive than one week ago, 17 cents more expensive than one month ago, and 28 cents more expensive than one year ago.
While the national average price continues to rise, the rate of increase has begun to slow.
So why are the gas prices so high? Industry experts cite Middle East tensions, pipeline disruptions, refinery problems, and now, the seasonal switch to the pricier summer blend.
“The main thing is the tension in Iran, where they are threatening to disrupt about 20 percent of the world’s oil supply,” said Cathy Hein, a spokeswoman for AAA Carolinas. What’s built into the rising prices is a “future fear of what could happen,” she said.
The other major factor is the current switchover by refineries to the cleaner-burning summer blends of fuel.
“That disrupts supply a little bit, too,” Hein said.
Gas prices typically rise in the spring as refiners shut some operations and reduce supply in order to switch from producing winter grades to less-polluting summer blends.
But this year, the refining market in eastern North America is even tighter as several refineries have been closed amid competitive pressures.
Speculators are plowing money into gasoline futures on the New York Mercantile Exchange in anticipation of further closings, notably a large Sunoco refinery in Philadelphia. The company is looking for a buyer for the facility, which has been squeezed by high crude prices, slack demand in the eastern U.S., and growing competition from mega-refineries in India and China.
As a result, consumers are paying more for their fuel.
Benchmark U.S. crude fell $1.22 to close Tuesday at $104.01 a barrel in New York, and Brent crude was down 57 cents to finish at $124.86 a barrel in London.
A Fleet Tracking System Can Help You Reduce Your Monthly Fuel Costs
If your family or your business has been affected by this year’s rising gas prices, then you may want to consider purchasing a fleet tracking system. A fleet tracking system can provide an ROI in less than six months and immediately reduce fuel consumption up to 20%.
In today’s tough economic climate, profit margins are slim and companies must implement as many cost-saving initiatives as possible. In order to stay competitive, companies have to look very closely at every penny spent. Utilizing a GPS fleet tracking system can be one of the most cost effective means to manage and reduce fuel consumption.