Streak Ends: Gas Prices Fall 1/10th of 1 Cent After 36-Day, 48.8-Cent-Gallon Run-Up
It's sort of good news. Gas prices finally stopped going up - dropping all of 0.1 cent over night. But it's the first time in more than a month. The last price drop had been January 17.
Drivers are taking it on the chin this winter. Since January 17, prices for regular gasoline have shot up 48.8 cents-a-gallon. In February 2013, gas prices hit new records for the time of year, just a year after new record highs for February had been seen. Before last year, gas prices typically fell in February. Today's price is 13.3 cents higher than this time last year.
There is some concern that prices will keep on rising, topping the all-time high of $4.11 (set in 2008), according to USA Today. They quoted Atlas Commodities oil broker Carl Larry "who expects $4.10 to $4.25 a gallon gasoline."
But the Oil Price Information Service (OPIS) is sticking with predictions of an April peak of roughly $3.95-a-gallon. Tom Kloza, chief oil analyst for OPIS, said this 36 day price-hike streak was just shy of the 38 days straight in 2012. He had noted on Thursday that gas prices might see a drop because "we've seen wholesale prices back off by 10-15 cts gal."
Consumers were already seeing gas take a bigger chunk of their income. In 2012, they spent more of their household income on gasoline than they had in 30 years (tied with 2008), according to the Energy Information Administration (EIA).
Elizabeth MacDonald of Fox Business Network wrote on Feb. 20, that "it's not just speculators, nor the summer blend switch, nor even refinery logjams" that have helped cause the recent gas spike. What is it? Taxes, she said.
Based on information from the EIA, she explained that Gulf Coast crude inventories declined in December, because "oil companies try to reduce the tax they must pay on the value of their oil holdings." States like Louisiana and Texas tax oil companies on Dec. 31, so "The lower the inventory, the lower the tax bill for oil companies."
John Townsend of AAA Mid-Atlantic, told The Washington Post: "this is a double whammy for many consumers, especially on the East Coast, because many people there use home heating oil. . . . People got that shock to the system and now a shock at the gas pumps." And of course, it comes just after the payroll tax cut expiration left people with smaller paychecks.