Why even with the gas tax, fuel will be a bargain … for now
If you’ve been out of the country for a while, in a coma, or totally preoccupied at work for the past several months, you might be in for a bit of a shock when you head to your local gas station to fill 'er up.
The price of a gallon of gasoline went up about 23 cents a gallon on Tuesday, due to an agreement reached last month with legislative leaders and the governor to replenish the state Transportation Trust Fund, which ran out of money four months ago.
So where do we go from here?
According to Tom Kloza, the global director of energy analysis for the Oil Price Information Service, prices at the pump will probably drop slightly for the next few months.
He said November is traditionally a down month for gasoline prices on the wholesale level, and crude oil prices are still relatively low, below $50 a barrel.
“It’s going to be a touch and go month because there is an OPEC meeting in November, but I don’t think it’s going to hurt that much. We’re still going to see some price levels on either side of 2 dollars a gallon,” he said.
Kloza said even with a 23 cent-per-gallon increase, what you pay for gas is still a relative bargain.
“On Election Day this year we’ll probably be paying $2.10 or $2.15 a gallon, but we were paying $1.35 a gallon more than that, or something in the $3.40 to $3.50 range, on Election Day 2012,” he said.
Moving forward, Kloza expects prices to rise in 2017, but not dramatically.
“If there’s a recession next year all bets are off, but we think gasoline prices, which peaked this year at about $2.30 or $2.40 or somewhere in that neighborhood, they’ll be about 10 or 20 cents higher on average in 2017," he said. "So if you add that with the 23 cent increase in New Jersey, maybe at the worst you’ll be paying $2.75 a gallon in the late spring.
“I think under any circumstances 2017 is another cheap year, not as cheap as 2016, but maybe somewhere in the range of what we saw in 2015.”
He said no one really knows what will come out of the OPEC meeting later this month, but “my hunch is OPEC is not going to do anything too dramatic and prices may bleed a little bit lower in the dead of winter.”
Kloza added the bottom line is after a slight decrease in gas prices for the next three months, “they will certainly go up when everybody is excited about the Mets and the Yankees in spring training next year."
He said prices at the pump will rise because of the formula of the gasoline will change in the spring, “but a lot of it has to do with trading patterns, and the fact that from May through September we probably use a little bit more gasoline than we produce.”
|Lowest Gas Prices in New Jersey|
|New Jersey Gas Prices provided by GasBuddy.com|
More from New Jersey 101.5: