LI gas prices rise 6 cents in a week

Gasoline rose by about 6 cents a gallon on Long Island in the past week, as a state tax increased, a federal subsidy evaporated and tensions between Iran and the West raised fears of shortages.

The AAA said regular gasoline averaged $3.618 a gallon in Nassau and Suffolk counties Thursday, up 6.2 cents from a week earlier. The state Energy Research and Development Authority, meanwhile, said heating oil from full service dealers averaged $4.049 a gallon Monday, up 4.1 cents from a week earlier.

Kevin Beyer, president of the Long Island Gasoline Retailers Association, says an increase of almost a penny a gallon Jan. 1 in the state petroleum business tax, plus the end of federal subsidies for ethanol blending in gasoline, combined with international events to push wholesale prices higher. Retailers passed some of that along to consumers. "They just couldn't hold out anymore," he said, predicting further increases in coming days.

The ethanol subsidy translated to 4.5 cents a gallon of finished gasoline, said the American Petroleum Institute.

Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc, says Iran's threat to close the Strait of Hormuz, through which about 17 percent of the world's oil is transported, is the key factor. "It's rising crude oil prices in the face of geopolitical tensions," Lipow said. Since Dec. 19, U.S. crude oil has risen from less than $94 a barrel to $101.81 Thursday.

Dominick Chirichella, senior partner at the Energy Management Institute in New York, said that regardless of the value of crude oil when taken from the ground, or when refined weeks or even months ago, the price of crude oil and refined fuels such as gasoline can change at any time on the way to consumers. "It's a commodity," he said, "It can go anyplace."

Meanwhile, U.S. gasoline stocks last week were about 1 percent higher than a week earlier and a year earlier, and U.S. demand for gasoline trailed levels a year earlier -- by 3 percent.