N.J. Gas Prices Rising, And They're Going To Get Much Worse

New Jersey drivers have already dealt with one big gas tax hike. Can they deal with another?

Gas prices hit $2.44 on Wednesday, a 6-cent increase since the beginning of the year and a 12-cent increase since Dec. 14., according to Katheen Miller of AAA Mid-Atlantic.

Now experts are saying an OPEC agreement to cut oil production, as well as other factors, could boost costs even more, pushing New Jersey's average gas prices to close to $3 a gallon by Memorial Day.

"It will be painful, and it will be enough to provoke a pissed-off population," Tom Kloza, a global petroleum expert for Oil Price Information Service, told Patch.

Kloza told Patch New Jersey could see a 50-cent spike in gas prices by Memorial Day — combined with last month's hike. He said demand is rising, and for the first time in a few years, it's exceeding production.

"This is the first [time] since 2013 that we're using more oil than we're sending to market," he said.

The increase is also largely a reflection of OPEC deciding to cut production by 1.2 million barrels a day, Siamack Shojai, a global economist and dean of William Paterson University's Cotsakos College of Business, told Patch. "But they [OPEC nations] cheat," he said. "They always produce more than they say they do."

Kloza, however, said the increase is also a product of what happens in New Jersey. As the weather warms, more people drive — and prices go up.

But he doesn't think gas prices will return to the highs of four or five years ago, when prices reached $4 a gallon. More production because of fracking and other methods has helped level off prices in the United States.

Shojai and Kloza said prices could reach 20 cents a gallon higher than the national average, which is around $2.37. Kloza said he expects it could hit $2.85 on average in New Jersey.

Kloza suggested that people vent their anger not just at the oil companies but also at Gov. Chris Christie and New Jersey lawmakers, who reached an agreement last year to fund the Transportation Trust Fund through a 23-cent increase in the state's gas tax.

Christie said state lawmakers reached a deal to reauthorize the Transportation Trust Fund for eight years at $2 billion a year. The deal includes various tax cuts, including a reduction in the sales tax and an eventual elimination of the estate tax.

Sales tax reductions include an incremental reduction on Jan. 1, 2017, when it was to go down from 7 percent to 6.875 percent. The following year, the sales tax will go down another quarter of a point under the terms of the deal.

Patch file photo