BP gas station on the Hempstead Turnpike in Levittown on...

BP gas station on the Hempstead Turnpike in Levittown on Friday. Credit: Howard Schnapp

Gas prices are ticking up as mild winter weather spurs more drivers to hit the roads and the global oil market reacts to China reopening its economy following COVID-19 pandemic-related shutdowns, fuel experts said.

The average per-gallon price of regular gas on Long Island on Friday, $3.501, was up 30 cents from a month ago, according to AAA.

Friday's average was about 5 cents more than the price a year earlier, but was well below the record-breaking $5 per gallon that gave drivers' wallets pain at the pumps in June. 

Despite the price increases, Long Island’s average gas cost, which is typically 20 cents to 25 cents more than the national average, is nearly the same as the U.S. average, which was $3.509 on Friday.

What to Know

  • Long Island's gas prices crossed the $3.50 mark on Friday.
  • The national average price of regular gas should hit $3.60-$3.75 per gallon by March or April, according to projections by Denton Cinquegrana, chief oil analyst at the Oil Price Information Service.
  • Moody’s Analytics projects that national gas price averages will remain close to their current levels for most of the year, but rise to $3.75-$4 per gallon this summer.

“I would say enjoy it while it lasts but don’t expect it to last indefinitely,” Chris Lafakis, director of energy and climate economics at Moody’s Analytics in West Chester, Pennsylvania, said of Long Island's prices.

The Island's prices might be being affected by the expiration last month of partial fuel tax caps, put in place to offset price surges last year, and a delayed reaction by retailers, wholesalers and distribution companies to the changes in the tax policy, he said.

No longer in effect are a 16-cents-off New York state tax cap; a three-fourths of a cent off state sales tax suspension in the Metropolitan Commuter Transportation District, which includes Long Island; or partial caps in Nassau and Suffolk counties of sales taxes for gas prices above $3 a gallon.

 

Moody’s projects that national gas price averages will remain close to their current levels for most of the year, but in the summer, prices will rise to $3.75 to $4 per gallon, Lafakis said. 

Summer prices tend to rise because that season is the most popular for driving, and because of the government-mandated use of special summer-blend fuels, which have lower vapor pressure to reduce smog production, but are more expensive because they are harder to refine.

Denton Cinquegrana, chief oil analyst at Oil Price Information Service, based in Rockville, Maryland, expects the national average price of regular gas to hit $3.60 to $3.75 per gallon by March or April, he said.

“But I don’t see it getting back to $5 a gallon like it did last year,” he said.

Crude moves

The biggest factor affecting gasoline prices nationwide is the global price of crude oil, which is refined to make gasoline, diesel, heating oil and other petroleum-based products.

There are several reasons for oil prices rising now, including the global oil market reacting to China reopening its borders this month after shutdowns that began at the start of the COVID-19 pandemic, Cinquegrana said.

“I think that’s playing the biggest role in oil prices moving up right now,” he said.

Another factor is the European Union’s total ban on imports of Russian refined oil products that will go into effect Feb. 5, a retaliatory effort to cut into the country’s profits because of its invasion of Ukraine, experts said.

“It’s clear to us that Russia won’t be able to supply as many barrels in 2023 as in 2022,” Lafakis said.

Consumers' gas demand is typically weak in January.

But mild winter weather has more people driving, said AAA, citing Energy Information Administration data showing that the nation’s gas demand rose from 7.56 million barrels per day the previous week to 8.05 million barrels per day last week.

Still, fuel demand is weak compared to where it was a year ago, with demand for diesel down 13.6% and demand for gas down 4.7%, Lafakis said.

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