Gas prices jump and likely will stay up

Retail gasoline prices jumped 7 cents per gallon in the past nine days because of a combination of the recent cold snap, diminished supply and a relatively weak dollar.

Unfortunately, prices are not likely to fall anytime soon.

Gasoline prices “are about the lowest they’ll be this year,” said Deborah DeYoung, AAA mid-Atlantic spokeswoman.

The price jump that began Jan. 5 is the first significant increase since October.

Washington-area motorists went from paying $1.49 per gallon of regular unleaded Jan. 5 to an average of $1.56 a gallon now, according to AAA Mid-Atlantic.

Last year at this time, motorists paid $1.49 per gallon of regular unleaded.

“It’s been anticipated for awhile because of weather and OPEC’s decision to cut production so significantly,” Miss DeYoung said.

On Nov. 1, the Organization of Petroleum Exporting Countries announced it would cut production by 900,000 barrels per day, driving up demand along with prices.

In addition, some state and federal lawmakers are considering raising gasoline taxes to pay for transportation projects, Miss DeYoung said.

Currently, gas taxes in the Washington area add between 37 cents and 42 cents to the cost of a gallon of gas, with the state and federal portions divided roughly evenly.

“By this time next year, we do expect to see higher gas taxes,” Miss DeYoung said.

Cold weather this month increased demand for home-heating oil, which further diminished the supply of oil available to make gasoline.

Middle Eastern oil barons show no signs of increasing production to ease the crunch.

Story Continues →