Thursday, April 26, 2018
Business

Gas prices spike as Labor Day travel weekend approaches

TAMPA — Gassing up a 2012 Pathfinder, Efrain Scull watched dumbfounded as the gauge spun past $85. He spent another $22 to fill a 5-gallon container.

"More than a hundred bucks," said Scull, 57, who was filling up for his employer, Courtesy Nissan of Tampa, on Thursday. "Glad this is not out of my pocket. I don't make that much."

On the eve of a busy Labor Day travel weekend, drivers across the country are grappling once again with huge spikes in gas prices.

Local drivers have never paid more for gas this late in the summer. On Thursday, unleaded averaged $3.77 in Tampa-St. Petersburg-Clearwater, according to the AAA Daily Fuel Gauge Report. That's substantially higher than what analysts say is the previous peak for this date: $3.61 back in 2008. A year ago, it was just $3.49 a gallon.

Average prices around Tampa Bay are still more than 20 cents below the $4 per gallon level briefly breached four years ago. The bay area record of $4.01 was set July 16, 2008.

Hurricane Isaac is at least in part to blame. Its path through the Gulf Coast caused a temporary shutdown of offshore rigs and refineries and a subsequent spike in wholesale prices at a time prices were already trending up.

As a result, some parts of the Midwest reported 30-cent jumps overnight. The national average price of a gallon of gas rose almost 5 cents Wednesday to $3.80, the highest ever for that date. Thursday it was up another 3 cents.

In the Tampa Bay area, prices for regular unleaded are up 40 cents over the past month — 12 cents just this past week. And more pain at the pump is in the forecast.

"Short term, unfortunately, I do think we're going to see prices increase through the (Labor Day) holiday," said Jessica Brady of AAA in Tampa. "Just how high they're going to increase at this point is unknown. We'll know better once workers can get back to the refineries and platforms in the gulf and assess potential damage."

As with any period of rapid run-up, prices varied widely station to station. TampaGasPrices.com showed two Marathon gas stations in Auburndale as low as $3.60, and a couple of St. Petersburg stations near the $4 mark.

Relief is in sight, industry experts say. In the weeks after Labor Day, prices typically drop off as refineries shift to cheaper winter blends and vacations give sway to work and school routines.

Fred Rozell, director of retail pricing at the Oil Price Information Service (OPIS) in New Jersey, predicts another 5- to 10-cent increase nationally "at most" and then a steady drop toward the end of the year.

Prices were already rising in recent weeks due to higher demand and disrupted supply lines. Among other factors: a major explosion in the largest refinery in Venezuela.

Then came Isaac.

"Any indication of strong winds blowing through the gulf gets traders all riled up and the prices go higher," Rozell said. "The precautionary shutdown (of some rigs) caused wholesale prices to really skyrocket. They were up 30 cents or more in some cases."

Idled Gulf Coast refineries are expected to be up and running in the next week or two. Rozell predicted that prices would fall, perhaps dramatically, by late September.

That's little consolation to Tampa drivers like Dr. Harold Tuch, 60, who was surprised Thursday that it cost $50 to fill up his fuel-efficient Honda Accord at a Shell station on N Dale Mabry Highway, just north of Raymond James Stadium.

Tuch, a physician at Tampa General Hospital, said there may be less angst over rising prices lately because people are accustomed to paying well over $3 a gallon.

Nevertheless, the recent spike "is definitely noticeable," he said. "A very rapid increase seems out of proportion with what the supply is. Was the supply really that different today?"

Jeff Harrington can be reached at (727) 893-8242 or [email protected]

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