Gas prices poised to drop 30 cents
ALBANY — After hurricanes Harvey and Irma sent gas prices to a three-year high in Georgia and neighboring states, the market is positioned to start a price decline as demand lessens, production recovers and winter-grade gas returns to the market.
“Hurricanes Harvey and Irma delivered a 1-2 punch on gas prices in the Southeastern U.S.,” Mark Jenkins, a spokesman for AAA Auto Club Group, said. “Prices surged when Hurricane Harvey caused refinery outages along the Gulf Coast.
“As refineries recovered, gas prices should have begun to decline after Labor Day, but the arrival of Hurricane Irma caused a surge in demand, preventing the impending plunge.”
Instead of dropping, prices reached three-year highs in Georgia, Florida and Tennessee. Georgia’s Sept. 12 average of $2.76 on AAA’s Daily Fuel Gauge Report survey was the highest average for the state since November 2014.
Southern states also saw the top five monthly price increases. Georgia’s jump of more than a half-dollar was trailed by Florida, South Carolina, Tennessee and Alabama.
GasBuddy senior petroleum analyst Patrick DeHaan said parts of the U.S. are already seeing declines.
“As we welcome back winter gasoline across most of the country, gasoline production has continued to recover after Harvey, leading much of the country to enjoy falling gasoline prices along with fall weather,” DeHaan said. “With refineries continuing to get back online and with demand cooling off from the summer months, we have more room to see the national average drop in the week ahead. In fact, this week could see some of the largest drops in gas prices in many months.
“It still will take time to completely heal from the issues Harvey and Irma left, particularly due to the large-scale disruptions of fuel logistics and production, but improvement will continue both with lower retail prices and high refinery output.”
Jenkins said the drop should be significant, but warned future storms could slow or stop it.
“Gas prices are poised to plummet 30 cents,” Jenkins said. “It will not happen overnight, as pump prices decline much slower than they rise. Plus, the threat of any new storms making landfall in the United States would compromise the collapse.
“However, motorists should see gas prices decline through the end of the month, and possibly reach the lowest point of the year in Q4 (the fourth quarter).”
Hurricane Maria, another powerful storm, was following a track similar to the one Irma took before slamming Florida and Georgia last week. The projected track of Maria improved some for Georgia and Florida on Monday as the cone for its probable path had it moving east of Florida later in the week.
With several days before a landfall event could occur, however, that track could move, as Irma’s did. Originally expected to move up Florida’s east coast, Irma made its northward turn later and moved up the peninsula.
The Virgin Islands were under a hurricane warning Monday. Maria is expected to directly hit Puerto Rico on Wednesday morning, pass just north of the Dominican Republic on Thursday and then head toward the Bahamas. Monday afternoon it had maximum sustained winds of 125 mph, but those were expected to increase to 150 mph within the next day and a half.
Georgia, which usually has an average below the national average, was running about a dime higher Monday. On GasBuddy’s national retail gas survey, Georgia was at $2.711, six-tenths of a cent lower than AAA’s survey found. AAA had the national average at $2.623, a decline of 4.5 cents in a week, while GasBuddy pegged it at $2.606, a drop of a nickel over the seven-day period.
GasBuddy’s survey had Georgia nearly flat compared to last week, while AAA showed a 4-cent drop on its survey.
Last year, U.S. motorists were paying around $2.20 a gallon, while Georgians were paying $2.26-$2.283, depending on the survey.
Metro Albany ranked third-lowest among the state’s eight largest metro areas on Monday on the Daily Fuel Gauge Report, dropping nearly a dime to $2.627 from last week’s $2.724. That was still 43.2 cents more than Albany motorists were paying last year, and 46.5 cents more than they were paying a month ago.
Augusta held its customary spot with the lowest average among the state’s metro areas at $2.611, followed by Columbus at $2.623. Metro Atlanta had the highest average at $2.774, according to the AAA survey.