Retail gasoline prices jumped 7 cents per gallon in the past nine days because of a combination of the recent cold snap, diminished supply and a relatively weak dollar.
Unfortunately, prices are not likely to fall anytime soon.
Gasoline prices “are about the lowest they’ll be this year,” said Deborah DeYoung, AAA mid-Atlantic spokeswoman.
The price jump that began Jan. 5 is the first significant increase since October.
Washington-area motorists went from paying $1.49 per gallon of regular unleaded Jan. 5 to an average of $1.56 a gallon now, according to AAA Mid-Atlantic.
Last year at this time, motorists paid $1.49 per gallon of regular unleaded.
“It’s been anticipated for awhile because of weather and OPEC’s decision to cut production so significantly,” Miss DeYoung said.
On Nov. 1, the Organization of Petroleum Exporting Countries announced it would cut production by 900,000 barrels per day, driving up demand along with prices.
In addition, some state and federal lawmakers are considering raising gasoline taxes to pay for transportation projects, Miss DeYoung said.
Currently, gas taxes in the Washington area add between 37 cents and 42 cents to the cost of a gallon of gas, with the state and federal portions divided roughly evenly.
“By this time next year, we do expect to see higher gas taxes,” Miss DeYoung said.
Cold weather this month increased demand for home-heating oil, which further diminished the supply of oil available to make gasoline.
Middle Eastern oil barons show no signs of increasing production to ease the crunch.
At the same time, the American dollars they are paid are buying less on the foreign market compared with other currencies because of a trade imbalance.
“They’ve been steadfast in saying they’re going to keep their quotas at the current level,” said John Felmy, economist for the American Petroleum Institute, a Washington-based trade group for oil companies.
“They’re especially concerned because the dollar has depreciated so much,” he said.
Prices in the Washington area are about the same as prices nationally.
The national average for regular is $1.56 per gallon, midgrade averages $1.66 per gallon and premium costs $1.72 per gallon.
In the Washington area, regular averages $1.56 per gallon, midgrade is $1.65 per gallon and premium is $1.70 per gallon.
Service station managers say there is little they can do to avoid passing on the higher prices to their customers.
“Some customers say some things about the price,” said Juan Torres, manager of White House Mobil at 1442 U St. NW. “It’s a little high. We received an order from Mobil to change the prices so we try to explain that to the customers.”
John Papuchis, manager of Capital Amoco at 4900 Wisconsin Ave. NW, said he is trying to keep prices a few cents below the average, but knows he must raise them soon.
“Absolutely,” Mr. Papuchis said about his plans to raise gas prices. “I just haven’t gotten around to it yet. We’re trying to keep business flowing.”
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