NHBR Article

Gas prices jump by 10 cents in a week

Thursday, October 22, 2009

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If it seems as though gasoline prices have been rising almost daily, they have been. Prices at the pump in New Hampshire have climbed by nearly 10 cents in the last week.

The average price of a gallon of regular gas was $2.48 on Wednesday in the Manchester area, according to the American Automobile Association's daily Fuel Gauge Report. This is 9 cents higher than last week's average price. Average prices in Portsmouth were up nearly 8 cents from last week, to about $2.52 per gallon, up from $2.44.

While the price increases feel eerily similar to the volatility of last year, they are still far below the historic highs of July 2008, when average gas prices reached $4.023 per gallon and diesel edged near $5 a gallon. Current prices are still lower than they were last month, when prices hovered about $2.55 per gallon for regular.

Diesel prices in both the Manchester and Portsmouth areas also have climbed. A gallon of diesel in Manchester costs about $2.68, up from $2.59 a week ago and $2.65 a month ago. Diesel prices in the Port City increased similarly, and currently are about $2.71 per gallon.

Part of the reason behind the price increases is that the price of a barrel of oil has skyrocketed to nearly $82 following eight straight days of price hikes.

Adding insult to injury, per-barrel oil prices are closely tied to the U.S. dollar, which on Wednesday stood at $1.50 against the euro for the first time since August 2008.

With consumers tightening their belts to weather the recession, gas consumption also has dropped significantly. This, in turn, has prompted refiners to make less gas, which, in turn, has decreased supplies.

The federal Energy Information Administration in its weekly report said that gas supplies fell by more than 2 million barrels in the last week.

This perfect storm of price and trading has U.S. Energy Secretary Steven Chu worried about the effects on already strapped consumers.

“We've repeatedly said what the world wants and needs is stable prices. They have been inching up recently and it's a little bit concerning,” Chu said at a press conference Tuesday in Washington.

As the Northeast heads into cold weather, the price of heating oil is starting its seasonal price climb as well.

The EIA said the national average residential heating oil price increased 10.2 cents per gallon last week to reach $2.635 per gallon. The good news is that this is nearly 60 cents per gallon cheaper than at the same time last year.

In New Hampshire, heating oil prices are about $2.434 per gallon, according to the state Office of Energy and Planning, up from $2.349 last week, but still significantly lower than last year at this time, when residential heating oil was about $3.337.— CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW

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