Big Apple gas pump prices could hit $4.55 a gallon by Memorial Day — and, at that level, likely stall the economic recovery as consumers dig deeper to fill up their cars.
A government report yesterday confirmed what many motorists don’t want to hear — there’s a “one in four chance the US average pump price of regular gasoline could exceed $4 in June this year.”
Some city gas stations are already charging more than $4 a gallon, but most motorists are currently paying around $3.80 a gallon.
The short-term forecast by the US Energy Information Institute went out on a limb as a grim oddsmaker, due in part to a surprise surge in pump prices last month — the most expensive January for gasoline on record — when prices jumped 20 cents a gallon.
Analysts see even sharper rises at pumps here as weather warms.
“There’s a potential for $4.60 a gallon in the New York area, but probably only at a handful of stations,” said senior petroleum analyst Patrick DeHaan at GasBuddy.com, which tracks prices.
“We’re projecting gas pumps in New York City at between $4.30 and $4.55 a gallon around Memorial Day.”
One cause of gas-pump gouging arriving early in a month that’s historically one of the year’s lowest-priced periods is a stiff hike in pump taxes.
The so-called petroleum business tax on a gallon jumped on Jan. 1 to 17.8 percent from 17 percent. About 85 percent of the take goes to the Metropolitan Transportation Authority.
“The last time we computed the take on that tax back in 2009, the MTA got more than $980 million that year from drivers,” said Robert Sinclair, a spokesman for the American Automobile Association (AAA).
He added that New York area drivers are purchasing nearly the same amount of gas as they did in 2009. With the hike in the take, the MTA’s take will go up in 2012.
“It’s a foregone conclusion that we’ll go to [an average price of] $4 or higher,” Sinclair said. “But its too early to tell if this will slow down summer road trips.”
“Vacations are sacrosanct, and come hell or high water, people will take their vacations,” said Sinclair.
Sinclair said AAA’s popular fuel-cost calculator to plot trips is still getting heavy use, a sign that road-trip dreams aren’t dying, at least for now.
Some experts said that speculators are artificially driving up the wholesale prices of gasoline, sometimes by as much as a dime a gallon in a single day.
“There’s nearly $10 billion more money bet on a higher price outcome of gasoline futures than [on] a lower price outcome,” said Tom Kloza, chief oil analyst at the Oil Price Information Services, an industry research firm. “That’s the third highest skew on record.”
He sees prices peaking as early as April at about $4.25 nationally and even higher in New York, which he branded a “hot spot for higher prices.”
“Presidential politics will see plenty of blame attributed to both parties with gas at $4 or higher,” he said.
Some analysts blame refiners for creating shortages of gasoline stocks this year.
“Shareholders are pressuring refiners to search for crude rather than refine it,” said energy analyst Perer Beutel at Cameron Hanover. “Profits on exploration are 20 percent, and just 5 to 10 percent on refining.”