TAMPA, Fla. — New records are being set again in Florida and not in a good way.
The state average price for gasoline reached a new record high of $4.49 per gallon on Sunday. This beats the previous record of $4.38 per gallon set back in March soon after Russia invaded Ukraine.
Before this year, the record high was $4.08 per gallon, which was set back in 2008.
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Florida’s average price jumped about 30 cents in the past week. The state average is now $1.60 per gallon more than a year ago. It now costs $67 for a full 15-gallon tank of gas. That is $24 more than what drivers paid at this time last year.
“Drivers are dealing with unprecedented pain at the pump, and things could soon get worse before they get better,” said Mark Jenkins, spokesman, AAA, the Auto Club Group. “We saw more big gains in the gasoline futures market late last week, which could trickle down to yet another 10-20 cent jump at the pump in the near future.”
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What is driving rising gas prices?
Global fuel supplies are tight, which keeps upward pressure on oil prices. This pressure, in turn, accounts for more than half the price of gasoline.
The price of U.S. oil closed at $110.49 billion on Friday, which is 69% more than this time last year.
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The fuel market was tight heading into 2022 as many oil producing countries had yet to return to pre-pandemic levels, even as demand rebounded.
The Russian invasion of Ukraine compounded the problem, as the oil market effectively cut out one of its largest oil exporters in the world.
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Fuel price gains accelerated even more during the past couple weeks when the EU announced plans to ban Russian oil by the end of 2022. The primary market driver of this news is that these countries are heavily reliant on Russian fuels and will now have to find alternative sources in what is already a tight global fuel market.
Oil prices are not at record highs but gasoline futures are. U.S. gasoline supplies are declining as international demand for U.S. gasoline grows. This is all while the market braces for a summer driving season that is stronger than last year.
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U.S. gasoline supplies have dropped 6% over the past six weeks. U.S. gasoline exports are 20% stronger than this time in May 2019, due to strong international demand for gasoline.
The increased competition, both domestically and abroad, has driven up the bidding price for each barrel of fuel.
While all this plays out on a global scale, the U.S. fuel market is bracing for the summer travel season, and analysts expect gasoline demand to be stronger than last year.
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Is there a light at the end of the tunnel?
The International Energy Agency forecasts that sky-high fuel prices will cause U.S. oil production to return to pre-pandemic levels by the end of 2022. According to latest reading from the EIA, U.S. oil production is at 11.8 million barrels per day, which is about 10% below the pre-pandemic record-high of 13.1 million barrels per day.
A return to previously record-high production levels could cool the fuel market and lead to lower prices. However, given the recent shifts in global supply and demand, it may not immediately signal a return to $2 a gallon gasoline.
“Unfortunately, $4 gasoline is likely to be that unwelcome passenger on most Florida summer road trips,” Jenkins continued. “At this point, the state average is not expected to exceed $5 a gallon. However, the fuel market is extremely unstable, and things are changing by the day. Either way, drivers should expect gas prices to keep fluctuating throughout the summer and potentially the rest of the year.”
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Regional Prices:
Most expensive metro markets: West Palm Beach-Boca Raton ($4.63), Fort Lauderdale ($4.55) and Sebastian-Vero Beach ($4.53).
Least expensive metro markets: Pensacola ($4.28), Panama City ($4.29) and Crestview-Fort Walton Beach ($4.30).
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Ways to Save on Gasoline:
Combine errands to limit driving time.
Shop around for the best gas prices in your community.
Pay with cash. Some retailers charge extra per gallon for customers who pay with a credit card.
Remove excess weight in your vehicle. Every 100 pounds taken out of the vehicle improves fuel economy by 1-2%.
Drive conservatively. Aggressive acceleration and speeding reduces fuel economy.
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