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Record high fuel prices are headed to Western New York, and while that may not even seem like news in 2012, analysts are providing plenty of scary predictions.
Jason Toews, co-founder of the website gasbuddy.com, said gas prices in the Great Lakes region, including Buffalo, could spike by as much as five to 20 cents per gallon before the week is done.
On average, he said he expects prices per gallon to jump by about 12 cents in the next seven to 10 days.
And what’s worse, he said that trend could be a bellwether for the year to come, since post-recession gas prices over the past four years have typically begun to rise each February, peaking around Memorial Day.
Translated, drivers quite possibly will be paying about 60 or 70 cents more per gallon this summer, or an estimated average of about $4.50 per gallon.
“We’re going to see some stations charging $5 per gallon,” he said.
Drivers in the Tonawandas have likely noticed the beginning of the price hike — predicted to be one of the most significant in years.
As of Wednesday, a snapshot of local filling stations include:
• Kwik Fill, 555 River Road near Wheatfield Street, North Tonawanda: $3.87.
• Gulf, 139 Main Street near Island Street, North Tonawanda: $3.85.
• Tops Express, 150 Niagara St., near Creekmore Drive, Tonawanda: $3.89.
• Mobil, 459 Division St. at East Robinson Street, North Tonawanda: $3.97.
• BJ's, 800 Young Street near Cranbrook, Tonawanda: $3.81 (Lowest in the general area according to gasbuddy).
The current average price in Buffalo is similar, at $3.83, while prices downstate are noticeably similar.
Toews said supply-side disruptions stemming from recent fires at U.S. refineries on the West Coast and speculation on Wall Street are contributing more than the price per barrel.
“They aren’t as much related to crude oil prices, but are largely driven by refinery issues domestically,” he said.
The resulting price hikes over the last few years have often been described as being “sticky” meaning they are slow to come down, if indeed they do at all.
Toews said what’s most significant about that is that it has changed Americans’ perception of what fuel is fundamentally worth.
As an example, he said if gas prices hit the $6 mark, “all of a sudden $3.83 is going to start looking cheap.”
On the subject of cost, Toews said state taxes must also be considered.
In New York state, motorists pay some of the highest taxes in the nation on gasoline. State, county and excise taxes account for a total of about .50 cents of the cost of each gallon.
The cheapest fuel in the nation is currently offered at a filling station in Casper, Wyoming, at $2.82 per gallon. Part of the reason, Toews said, is because taxes in that state are closer to .13 cents per gallon.
Gasbuddy Senior Petroleum Analyst Patrick DeHann said a refinery fire in Washington state is largely to blame for supply chain disruptions leading to a price hike originating on the West Coast, leading to spot price increases elsewhere. Stations boosted prices by 30 to 45 cents per gallon on Wednesday in Michigan, Indiana, Ohio and Kentucky.
The website uses volunteer “spotters” to report changes in fuel prices at more than 140,000 filling stations in the U.S. and Canada.
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