Long Islanders are still waiting for the usual drop in gasoline prices after Labor Day.
A temporary shortage of gasoline in the New York area from refinery closures has left Nassau and Suffolk drivers coping with pump prices that are higher, rather than lower, than on Labor Day. Analysts had predicted relief with the end of the summer driving season, as usually happens.
Analysts say the shortage should begin to ease and prices begin to fall over the next few weeks. Buttressing that view, crude oil prices declined Wednesday by $3.75 to $88.14 a barrel and gasoline futures slid -- both in trading on the New York Mercantile Exchange.
Crude oil, which had sunk to a recent low of $77.69 a barrel on June 28, reached a recent high of $99 on Sept. 14.
Meanwhile, the refining industry is in the process of switching to winter grade gasoline, which is less expensive to produce than the summer grade required by clean air laws.
Last year, prices fell through the fall and early winter so that the Long Island average for regular bottomed at $3.54 a gallon on Dec. 26.
This year, gasoline prices did fall for three days after Labor Day, by a total of five cents a gallon, but then began heading upward again.
Industry analysts blame the increase partly on the same factor that caused gasoline prices to rise for most of the summer: a shortage of refinery capacity to serve the East Coast. Within the past year, three refineries have closed -- one in the Caribbean and two in Pennsylvania. "The Northeast has been scraping by on tight supplies," said Andy Lipow, president of Lipow Oil Associates in Houston.
That was compounded more recently by an explosion at a refinery in Venezuela; the aftereffects of Hurricane Isaac on refineries in Louisiana; and downtime for scheduled and unscheduled maintenance and repair at other U.S. and European refineries that produce gasoline for the U.S. East Coast, said Lipow and gasoline analyst Sander Cohan of Energy Security Analysis Inc. in Wakefield, Mass.
Both analysts predict a gradual improvement in supplies in coming weeks. But, Cohan added, "It is going to be a tight October, supplywise."
Earlier this year, tensions between the West and Iran had caused oil prices to soar to almost $110 a barrel in February for the benchmark U.S. grade. Long Island's average for regular gasoline hit its peak so far this year at $4.169 on April 10. The average price for regular hit a high of $4.34 a gallon on Long Island in the AAA survey in July 2008.
-- With Bloomberg