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Average price for gas reaches $3 a gallon

Many area drivers say prices won't alter driving habits much

December 09, 2010|By JULIE E. GREENE | julieg@herald-mail.com
  • Christian Diaz of Greencastle, Pa., pumps gas Tuesday at the Sheetz store on the corner of East Baltimore Street and Antrim Way in Greencastle. Unleaded regular gasoline was selling for $3.09 per gallon there.
Colleen McGrath/Staff Photographer

With the average price of unleaded gas getting back over $3 this week in Hagerstown, some local drivers seemed resigned Wednesday to the higher gas prices.

“It is what it is. We all knew it was going to hit $3 some day,” said Michelle Lund, 30, of Williamsport.

Doug Hildebrand, 41, of Hagerstown said he was getting used to high gas prices.

“It’s just typical,” Hildebrand said.

Wednesday’s average cost for unleaded regular, $3.01, is 34 cents more than a year ago, when gas averaged $2.67 a gallon in Hagerstown, according to AAA Mid-Atlantic.

Prior to this week, the last time the average gas price hit $3 in Hagerstown was Oct. 15, 2008, AAA spokeswoman Christine Delise said.

Within the past week, the average price of gas in Hagerstown increased by at least 11 cents, according to AAA data. The average price was $3.02 on Monday.

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On Wednesday, the average price for unleaded gas was $3 in Maryland, $3.02 in West Virginia and $3.09 in Pennsylvania, Delise said.

For the record, the all-time high average price for unleaded gasoline in Hagerstown was $4.05 a gallon on June 11, 2008.

Nationally, the U.S. Energy Information Administration expects regular-grade gas to average $2.88 a gallon this winter, 22 cents per gallon more than last winter, according to its Short-Term Energy Outlook at www.eia.doe.gov.

Crude math

The cost of gas is tied to the cost of crude oil, which recently hit a two-year high of $89.38 a barrel on Monday, Delise said.

The long-term trend is for crude oil prices to increase as the world recovers from a global recession, said Tancred Lidderdale, senior economist with the U.S. Energy Information Administration.

Demand for crude oil is increasing in the United States, China, India and the Middle East, Lidderdale said.

Much of the jump in crude oil prices is due to weekly, even daily, volatility in the world economy, because no one really knows how quickly the United States and world economies will recover, Lidderdale said. Good news one day is followed by bad news another day, he said.

As a rough rule of thumb, every $1 price change for a barrel of crude oil equals 2.4 cents in the price of a gallon of gas, he said. The price of crude oil shot up $9 since Nov. 17, Lidderdale said. That’s almost a 22-cent gas price jump.

In the short term, gasoline supplies were affected in November when French refineries went on strike and two weeks ago when a Canadian refinery ran into a one-week delay restarting operations after fall maintenance, Lidderdale said. The Canadian refinery has since resolved its problem.

Both the Canadian and French refineries supply gas to the Northeast United States, so there was a ripple effect as the Northeast looked for gas supplies, Lidderdale said.

It takes time to respond to supply disruptions and distribution costs come into play, so it might cost more to get gas in the Tri-State area, according to Lidderdale.

Tax bite

Then there are the taxes.

The federal excise tax on gas is 18.4 cents per gallon, according to the American Petroleum Institute’s October 2010 fuel tax report.

With federal and state taxes and fees, the fuel tax is 41.9 cents per gallon in Maryland; 50.6 cents per gallon in West Virginia; and 50.7 cents per gallon in Pennsylvania, according to the report.

“You can’t stop going places because of gas (prices),” said Lund, while pumping gas into her Ford Explorer at the Pilot Travel Center on Greencastle Pike. Lund estimated it would cost $45 to fill the Explorer’s tank at current gas prices.

Lund said she would consolidate her errands so she’s more efficient with her gas usage.

“It’s really bad,” said Whitney Layton, 22, of Hagerstown.

Layton said the higher gas prices won’t affect her driving plans, but “will affect my money for sure.”

Filling up her Pontiac Sunfire at the AC&T/Exxon on Dual Highway was expected to cost $40, she said.

Jim Plummer, 78, of Hagerstown, said he would start looking for cheaper gas, perhaps using a grocery store gas rewards program.

Justin Harris, 25, of Hagerstown, said the higher prices wouldn’t change his plans, but his family lives in the area so he wasn’t planning a big holiday trip.

John Wilson, 24, of Frederick, Md., said that, with the tough economy, he was already curbing his spending habits.

Wilson said gas prices wouldn’t have much of an effect on his driving plans.

“Just means I pay more for gas,” he said.

Vanessa Pryor, 56, of Cascade, said gas and electricity prices were making life hard.

“You have to do the shopping that’s necessary,” Pryor said.

But Pryor said she won’t be doing any extra shopping and was already doing without a lot of things. She said her home was freezing because she turned back her thermostat considerably because of electricity costs.

Check gas prices

To compare local gas prices, try these websites:

• AAA’s Fuel Price Finder in the For Your Car column at midatlantic.aaa.com.

GasBuddy.com’s MarylandGasPrices.com.

• Automotive.com at www.automotive.com/gas-prices/31/maryland/index.html.

• Mapquest Gas Prices at http://gasprices.mapquest.com/maryland.

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