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AAA Carolinas: Gas Prices on the Rise

Aug. 15, 2012. 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.

“The outlook for the next few weeks is grim,” said David E. Parsons. “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.” Since falling to the year-low $3.18 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.

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.

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.

Factors pressuring the price 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.
  • The NOAA’s 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.
  • The potential for an economic recovery, both in the U.S. and abroad, which would increase demand.
  • The Midwest drought, which has caused ethanol prices to spike. Ethanol composes about 10% of regular gasoline.

Currently, North Carolina’s gas price is the 27th most expensive in the contiguous United States. The national average for a gallon of gas is $3.71; a year ago, it was $3.59.