CAPITAL REGION, N.Y. (NEWS10) – Frustration at the pump continuing this week, as the average cost of a gallon of gas in the Albany area nears the highs seen in March. According to GasBuddy, the spike is being caused by supply and demand issues, as well as the ongoing ramifications of Russia’s war in Ukraine.
“Prices in the last couple weeks have really started to throttle back up,” said Patrick De Haan, Head of Petroleum Analysis for GasBuddy.
Fuel prices in the Capital Region are now rivaling those seen shortly after Russia’s invasion of Ukraine caused shockwaves in the industry. According to GasBuddy, the average cost of gas in Albany was up to $4.41 a gallon Friday, 11 cents higher than the beginning of the week and 21 cents more than last week.
“Amidst high demand and low supply, refiners are running at about 90% of capacity, but they’re not able to keep up with high demand. This is really just an economics story,” De Haan explained.
That, and other factors, like the threat of the European Union sanctioning Russian energy as retaliation for its war in Ukraine, leading oil prices to creep back up. And while the cost of a barrel of oil is roughly $15 less now than its early March high, drivers in Albany are paying about the same in gas now as they were then.
“One of the kinks in the hose is not only if oil goes up then gas goes up, but if refineries aren’t able to produce as much fuel as needed, then supplies of the refined fuels take a hit, and that’s what we’re seeing,” said De Haan.
Refineries have also switched over to their summer-blend, which costs more to produce.
But while regular fuel prices have resumed their climb, it pales in comparison to diesel, “There’s simply not enough diesel to meet demand,” De Haan said. Like other fuels, the price is also being driven up by the war in Eastern Europe.
According to AAA data, the average cost of diesel in New York State was $6.31 a gallon Friday, just over a nickel more than Thursday and nearly 80¢ more than last week. Diesel prices reached a record breaking high at the end of April, when the average jumped to $5.16 per gallon.
The costs, squeezing the trucking industry, “For, let’s say a 10 truck operator, annually that’s about $1 million in fuel that they’re spending, and they typically only have about a 1% to 2% profit margin,” said Kendra Hems, the president of the Trucking Association of New York.
With diesel a driving force for many aspects of the economy, the historic costs to fill up are expected to have a ripple effect.
“It affects the trucking industry of course, but it also affects all of us. Between what we’re paying in fuel, but it also raises the costs of our goods,” Hems explained.
Some relief at the pump will begin next month when the state’s gas tax suspension should save 16¢ per gallon. Several counties will also cap local fuel taxes in an effort to bring additional savings.