Rise in LI gas prices slows, for now
The cash price for self serve regular gasoline at a Shell station on Commack Road and North Service Road of the Long Island Expressway in Commack. On Monday, March 14, gas prices in the United States rose for the 27th straight day. (March 4, 2011) Credit: John Dunn
The rise in gasoline prices locally has slowed but experts say there's more to come, even if crude oil stays about $100 a barrel. And that's a very big "if," in light of the Japanese earthquake and political unrest in the Middle East and North Africa.
At least one expert thinks U.S. truckers will be facing still higher diesel fuel prices soon as an indirect result of the shutdown of three Japanese refineries.
Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc, says that, even if crude oil remains in the $100-a-barrel neighborhood, motorists everywhere in the nation can expect to pay at least another five to 10 cents a gallon at gasoline pumps in coming weeks as more expensive-to-produce summer grade gasoline is phased into the distribution system.
Mitigating steeper increases, he said, are that drivers are conserving and most refineries are completing their late winter maintenance. "Over the next couple of weeks we'll start to see an increase in the supply of gasoline," he said.
Regular gasoline averaged $3.784 a gallon on Long Island Monday, the AAA said. That's unchanged from Sunday, but up 5 cents from a week earlier, 36.7 cents from a month ago and 85.2 cents higher than a year earlier.
Predicting the future of gasoline's main ingredient, crude oil, is tricky. Monday, for example, crude futures were pushed briefly to below $99 a barrel on speculation that Japan will use less energy for a time because of the economic disruption from Friday's earthquake and tsunami. But prices were pulled back up later in the day on reports of a coalition force led by Saudi troops entering Bahrain to help quell unrest there. In New York, light, sweet crude futures for April delivery settled at $101.19 a barrel, up 3 cents.
In Japan, the world's third largest energy consumer, demand has fallen, experts say, amid shuttered factories, damaged highways, closed gasoline stations and destroyed homes. "If factories are down, people are not going to work so they're not driving or using mass transit," said Lipow. That, he said, should help cool oil prices for a time.
But he says the temporary shutdown of three out of five major Japanese refineries could lead to higher diesel prices in the U.S. because Japan has been a major supplier of it to South and Central America.
Home heating oil jumped by 12.7 cents in the week ended March 7 to an average of more than $4 for the first time since September 2008 -- $4.067 exactly, according to a state survey of full service dealers in Nassau and Suffolk. A new average is due to be released Tuesday.
LThis story is supplemented with reports from The Associated Press and Bloomberg News.
Average LI gas price per gallon
Monday: $3.784
Month ago: $3.417
Year ago: $2.932
Source: AAA
