Advice for drivers: The sudden jump in petrol prices is not the last of the bad news, so fill up.
Efforts to cut global oil production, led by Saudi Arabia and Russia, have pushed up oil prices worldwide, and since oil is the base product refined to make gasoline, those prices have rippled through the market to drive pump prices higher.
Combined with an end to the U.S. government’s release of oil from the nation’s strategic reserve, the production cuts have squeezed supply just as summer demand for gasoline peaks, said Patrick DeHaan, senior oil analyst at Gas buddywhich tracks gasoline prices nationwide.
The track is ready, he said. “Sooner than later, you should look to fill your tank. Prices change quickly.”
By which he means: to stand up.
The average price of a gallon in metro Atlanta at midday Friday was $3.56, a stunning 34 cent increase in a month that included a 20 cent increase per gallon during the past week.
And that is not the end of the escalation.
State and federal taxes add about 50 cents to the price of each gallon. And while pump prices are often used as political ammunition, oil prices account for at least half of the price drivers pay at the pump. And the global price of oil is now higher than it has been since the beginning of April. The price of oil, set in commodity trading, peaked as well more than $84 a barrel of oil mid-Friday before retreating below $80.
Oil prices are part of the costs that are factored through the refining and distribution process and finally at the pump. And as the more expensive gas hits the retailers, they can very quickly adjust their prices.
In this case, upwards.
It has already begun to happen, and the flow of increases is far from complete, DeHaan said. “Many retailers are quite far behind in passing the recent increase in the price of gas.”
While oil prices are the main factor, problems at refineries and in pipelines can have a huge impact on the price – or even the availability – of gasoline.
Metro Atlanta drivers rely on pipelines that carry gas from refineries along the Gulf Coast, mainly in Louisiana, Mississippi and Texas. When hurricanes have shut down those refineries or disrupted pipeline operations, Atlanta has seen prices rise and — occasionally — experienced shortages.
“The Colonial Pipeline and the refineries that feed it are the primary concerns for Atlanta,” DeHaan said.
While electric vehicles are becoming increasingly popular and concerns about climate change make burning fossil fuels a growing concern, American drivers are still overwhelmingly listening to the lyrics of the old NRBQ song: “Get that gas.”
With school openings on the horizon and many families heading off on vacation, demand for gasoline is near its summer peak.
The nation uses about 9 million barrels of gasoline each day, according to the The Energy Information Administration.
The last time prices were this high was almost a year ago, and these prices seemed like a discount.
A year ago, in the market turmoil following the Russian invasion of Ukraine, metro Atlanta gasoline averaged $3.86 a gallon after peaking last June at $4.54 a gallon. Prices slid slowly through the rest of the summer, hitting $3.56 – Friday’s level – in late August on the way down to a low of $2.70 a barrel. gallon in the early winter, according to Gas Buddy.
In Metro Atlanta, the lowest price reported at noon Friday by Gas Buddy was an Exxon in Conyers at $3.09 per gallon. gallon for cash purchases.
Two stations — a BP and Shell in Atlanta — were the highest reported prices, both more than $4 per gallon. gallon.
Georgia’s most expensive county for gas late this week was Emanuel County, which averaged $3.69 per gallon, according to AAA. The cheapest gasoline in Georgia was in Quitman Countywhere gas averaged $3.20 per gallon.