Gasoline prices nationwide topped the $3.50 per gallon mark sooner than ever this year, and it’s probably just a matter of time before they surpass the all-time high of $4.11 for regular gas that was set in 2008.
Although overall gasoline demand is down 7 percent from last year and gasoline stocks have risen, the nation’s crude oil stocks are in decline.
Gasoline prices also are subject to other factors besides the demand across America.
AAA reports that crude oil prices have topped $103 per barrel in part because Iran’s top oil customers in Europe are cutting their purchases in advance of international sanctions.
This has prompted Iran to withhold oil deliveries and block the Strait of Hormuz, through which one-fifth of the world’s oil supplies travel.
Even though American demand is down, demand for oil around the world has increased. Also, some American refineries actually have shut down because they were spending more money to produce gasoline than they could sell it for. Speculation and fear about future supplies are also a factor, says AAA.
And if all this isn’t enough, Gov. Martin O’Malley has proposed a 6 percent sales tax on gasoline, to be phased in over three years on top of the 23.5 cents-per-gallon Marylanders already pay.
Don’t look for things to get better before they get worse.
