Why are Gas Prices Going Higher?

by Mary Ann Barton 

Virginia motorists were expecting a break at the pump this month, as gas taxes dropped July 1 as part of Gov. Bob McDonnell's transportation bill. 

But that price drop hasn't happened for a variety of reasons. One is that many gas stations are still selling gas they purchased before the tax changes. Other factors are contributing, too, and prices could even start rising again this week.

In Burke Tuesday morning, the lowest prices for gas is at Express Stop on Old Keene Mill Road which is $3.55 for a gallon of regular, according to AAA-Mid Atlantic's Fuel Price Finder. At other stations around the area, prices are creeping up, with most of them hovering between $3.60 to $3.75 per gallon.

“After several months of declines, it is quite possible that we have seen gas prices reach their seasonal low,” said John B. Townsend, manager of Public and Government Affairs for AAA Mid-Atlantic, in a news release. 

It's about to turn ugly at the pump though, starting this week, AAA says.

“Experts are warning motorists to brace themselves for what could be sticker shock at the pump in the weeks ahead," Townsend said. "A combination of higher wholesale gas prices, an increase in summer demand and concerns about instability in Egypt and North Africa has already sent prices higher in the past week, a trend that could continue through the remainder of summer.”

As what AAA-Mid Atlantic calls a “perfect storm,” of sorts, aligns — higher wholesale gasoline prices and a jump in crude oil prices, coupled with geopolitical concerns in Egypt and an unusually large drop in U.S. crude inventories over the last two weeks — gasoline prices are expected to rise sharply in the coming days.  

Short-term, gas prices are likely to go into the $3.60 to $3.70 per gallon range, according to Tom Kloza, chief oil analyst for OPIS and AAA gas price partner.  Gas prices peaked so far for 2013 on Feb. 27 at $3.79 per gallon and were last above $3.65 per gallon in May.

On Sunday, the average price for a gallon of regular gas in D.C. was $3.80; in the metro area it was $3.62. The national average was $3.60.

If you're hitting the road on a summer vacation, you can find gas prices along your route by downloading a free app from AAA.