Once a penny apart, gas in NJ now much more than U.S. average
TRENTON – Gas prices continue their steady drift down in New Jersey, a drop of 72 cents in 53 days. However, the decline hasn’t been as steep as it has been nationally.
One month ago, the average price for regular unleaded in New Jersey was 1.2 cents a gallon higher than the national average, according to AAA. The difference was similar a year ago this time, with New Jersey 1.6 cents higher.
But those prices have decoupled somewhat over the past month, as New Jersey’s average price of $4.338 is currently 22.5 cents higher than the national average of $4.113.
Tom Kloza, global head of energy analysis for Oil Price Information Service, said the reason is the reformulated gasoline used in many metropolitan areas in the summer due to concerns about air quality. All of New Jersey uses it, as it counties are covered by the New York and Philadelphia metro areas.
“That’s true not just in New Jersey but in the Northeast,” Kloza said. “And reformulated gasoline might normally sell for about 5 cents over conventional gasoline, but this year it’s been selling for 30 cents or 35 cents.”
Kloza said portions of the gasoline used in most of the Northeast come from Canada and Europe.
“We’ve lost one of the Canadian contributors in the last couple of years, and Europe is really hard-pressed to manufacture more gasoline than they need,” Kloza said. “And they have a tough time making the summer specification of reformulated gasoline that’s used in the metropolitan areas from Washington, D.C. north.”
The area switches back to conventional gasoline starting Sept. 15, so relief is on the horizon.
“That’ll all end in about 40 days, when you can put a lot of other ingredients into your gasoline and it’s easier for offshore refiners to meet it,” Kloza said. “Also, it swells volume at a time when demand for gasoline drops.”
While the national price drop has been greater, New Jersey’s average price is still down noticeably from the record $5.059 that AAA measured on June 13.
Kloza said the trend should continue for a while longer.
“I don’t think that the coast is clear yet. We still have about 40 days of peak hurricane season and heat waves that could knock out refineries,” Kloza said. “But it’s going to be smooth sailing for at least another week or two.”
One-third of states have higher average prices than New Jersey, and two-thirds are lower. Averages range from around $5.50 in California to $3.62 in Texas.