A solar eclipse. Summer travel. Here's why gas prices will rise in NJ this month
A solar eclipse. Summer travel. More expensive blends of gas for the warm weather.
These can all jack gas prices up over the next month, according to analysts.
Right now, New Jersey’s gas prices are 30 cents less than the national average, according to travel club AAA.
Expect that to change in just a few weeks, analysts say, as the Northeast region switches from the cheaper winter blends of gasoline to the more expensive summer blends.
That increase, set to take place through roughly April 15, means a “disappointing next couple of weeks,” said Patrick De Haan, head of petroleum analysis at GasBuddy.com.
“The price that wholesalers and fuel distributors will pay when they load up their gas trucks or deliver fuel to retail gas stations, basically overnight they’re going to pay about 30 cents more a gallon,” added Mark Schieldrop, senior spokesperson for AAA Northeast.
Even sooner is the solar eclipse on Monday, which might drive up demand as drivers in the Northeast try to find the best viewing spot, Schieldrop said. That spike could barrel into the switch towards the more expensive summer blend.
As of Thursday, the New Jersey average price was $3.25 a gallon, compared to the national average of $3.56 a gallon, according to AAA, and a state average of $3.15 a month ago.
Granted, that’s less than the $5.05 a gallon state average New Jersey saw in June 2022, when inflation hit a 40-year high.
While rare, some gas stations were still selling at under $3 a gallon, according to data from GasBuddy. That includes U.S Gas at 6 U.S. 46 in Fairfield and Conoco at 3440 U.S 46 West in Parsippany, as of Wednesday.
“So enjoy these prices,” De Haan said. But he doubted prices could top $4 a gallon in the near future.
Schieldrop said that crummy weather combined with lower demand in the Northeast kept gas prices low. Other factors such as the switch to electric vehicles and newer, more fuel-efficient vehicles have kept down the demand for gasoline, he said.
When could it spike?
Schieldrop said the spike to as much as $4 a gallon or more could happen close to Memorial Day weekend or the month afterward, as people gear up to hit the road.
Why the delayed price increase?
The Northeast is the last region in the continental United States to feel the spring weather, and that means they’re later to switch from the winter to summer blend, De Haan said.
The difference between the winter and summer blends comes down to the fuel’s Reid vapor pressure, which determines how easily the gas can evaporate at a given temperature.
In the winter, the gasoline used has a higher RVP, meaning it evaporates easier and enables the car to start in colder weather, according to the National Association of Convenience Stores.
Summer gas is the opposite, the NACS said, and it’s more expensive because production takes longer and the yield per barrel of oil is lower.
What else is at play?
De Haan, from GasBuddy.com, said that production cuts by OPEC, an association of oil-producing countries, could squeeze oil prices higher.
As of Thursday morning, West Texas Intermediate crude oil was trading at $85.35 a barrel, according to MarketWatch. Brent crude oil was trading at $89.29 a barrel.
But Brent crude oil was $10 less at the start of the year, MarketWatch data shows.
“These cuts are slowly inflicting more pain,” De Haan said.
But if these production cuts continue and deepen, and oil trades at above $95 a barrel, then De Haan warned that gas could reach into the $4 a gallon territory.
A higher gas tax
In March. Gov. Phil Murphy signed a bill increasing the gas tax by 2 cents per year for five years to finance transportation infrastructure projects across the state. The first hike is expected to hit on Jan. 1 next year.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com; Twitter:@danielmunoz100
This article originally appeared on NorthJersey.com: Here's why gas prices will go up in NJ this month, and when