Gas prices are likely to flucuate nationwide in the early days of the new year and will be driven by the ‘fiscal cliff’ and any deal Congress makes does not make to avoid it.
ALBANY, Ga. -- Retail gas prices climbed as 2012 came to an end, and that trend could continue into this year -- depending on whether a deal is made to avoid the fiscal cliff.
If a resolution to avoid the fiscal cliff is implemented, however, motorists are likely to see pump prices increase for an extended period of time, as the positive news is sure to create economic optimism in the market and push up crude prices.
Without a deal in Washington, oil prices will most likely retreat on speculation that fuel demand will drop further than it has in the past few months.
"Almost everything is riding on whether a deal is made to avoid the fiscal cliff," said Jessica Brady, AAA spokeswoman, The Auto Club Group, which produces a Fuel Gauge Report each week. "If the fiscal cliff is not avoided and the economy falls back into a recession, we're sure to see gas prices drop as fuel demand recedes. If a plan is put into place, gas prices will likely continue to increase throughout January, however it's doubtful we will see an immediate spike in fuel demand."
Currently, oil prices are holding steady around $90 a barrel as a deal on the fiscal cliff remains unknown. U.S. gasoline stockpiles are at a nine-month high as demand continues to wane. At noon Monday the price of crude was $91.23 on the New York Mercantile Exchange.
Despite that, average retail gasoline prices in Georgia have risen 6.9 cents per gallon in the past week, averaging $3.24 a gallon on Sunday, according to GasBuddy's daily survey of 5,883 gas outlets in Georgia. The Fuel Gauge Report showed Georgia at $3.252 per gallon Monday, up from $3.209 a year ago. Ga Buddy said Georgia prices on Sunday were 4.6 cents per gallon higher than the same day one year ago and were 2.9 cents per gallon lower than one month ago.
This compares with the national average that has increased 3 cents per gallon in the last week to $3.27, according to gasoline price website GasBuddy.com. The Fuel Gauge Report showed the national average for regular self-serve gas at $3.279 on Monday, up 2 cents from a ago. The national average has decreased 13.2 cents per gallon during the last month and stands 1.7 cents per gallon higher than this day one year ago, Gas Buddy reported.
"2012 was a year that focused the spotlight on our nation's oil refineries; it showed us the vulnerability of our infrastructure and what can happen to prices at the pump when infrastructure is compromised," said Patrick DeHaan, GasBuddy.com senior petroleum analyst. "We began the year with a BP refinery fire in Cherry Point, Wash., that caused massive spikes on the West Coast. The spring delivered challenges for Great Lakes refineries and pushed Chicago gas prices to a record high. Similarly, the California summer saw major refinery outages there and new record high prices."
Hurricane Sandy, which devastated a large swath of the East Coast, also came into play.
"Sandy delivered a punishing blow to the East Coast causing refinery shutdowns, flooding and power outages. The resulting fuel shortage triggered mile-long lines for gas," said Gregg Laskoski, GasBuddy.com Senior Petroleum Analyst. "New York gasoline spiked to a price level exceeding Honolulu and Anchorage as the highest in the U.S."
With elevated prices across much of the country for prolonged periods, 2012 brought the highest average price ever for U.S. consumers at $3.60 per gallon.
A check of Dougherty County gas stations on Monday showed local per gallon prices ranging from $3.25 to $3.37. The Fuel Gauge Report showed metro Albany's average at $3.32 per gallon Monday, about a nickel higher than this time last year.