Gas prices show no relief | Business

Prices at the pump, on average, are climbing despite the 16-cent break the state put in place last week and any relief from counties.

It comes down to higher wholesale oil and gas prices, AAA says.

“Oil prices continue to increase and the gas tax relief doesn’t amount to enough to counterbalance the increased price of oil, which had a direct impact on what we pay at the pump for gasoline,” said AAA of Western and Central New York Director of Public Relations and Corporate Communications Elizabeth Carey. “For example, right now oil prices range from $121 to $123 per barrel, up about $5 to $7 per barrel from a week ago. Oil makes up for at least half of each gallon of gas.”

Many drivers were expecting a break at the pump based on the announcement of the gas tax cap in the state and in many counties in New York, Carey said.

“Unfortunately, the 16-cent break from New York, and any additional county relief, have been offset by increased oil and gas prices at the wholesale level. The national average increased more than the state average in the past week thanks to the gas tax cap in New York,” she said. “Rising oil prices mean that gasoline is more expensive to produce and retail gas stations are being charged more at the wholesale level. Retail gas stations have the right to set their own prices based on supply and demand. If their wholesale prices come down, they should pass those savings onto consumers. However, if oil prices remain high, the price of gas will as well.”

When the New York state gas tax cap went into effect last week, prices did drop initially.

On June 2: the national average price for a gallon of gasoline was $4.71, up 9 cents in just two days. But in New York state on June 2, the average price per gallon had dropped to $4.83, a decrease of 10 cents per gallon.

On Monday, the national average was $4.87, up 25 cents in a week, AAA said Thursday. But the state average was $4.88, up 5 cents from June 2.

Later in the week, on Thursday, the average price for regular gas in Batavia was $4.90 per gallon, up 18 cents from $4.72 the previous week.

In the GLOW counties, the average prices Thursday afternoon were as follows: Genesee County, $4.90; Livingston, $4.96; Orleans, $4.97; Wyoming, $4.97.

“Most governments use fuel tax revenues to build and maintain transportation infrastructure. As a result, gas tax holiday proposals can create a funding gap for localities that use the funding for construction and repairs,” Carey said. “Given that gas taxes make up less than a fifth of the price consumers pay at the pump, removing it offers little margin for price decreases when compared to the other factors that contribute to 85% of the price paid by consumers at the pump.”

Moreover, when external market and economic factors impact the price of oil, rising crude prices can often play an outsized role in pushing pump prices higher, Carey said.

“As a result, the impact of gas tax holiday proposals can be limited because any price reduction from the lack of taxes can be quickly offset by a steady increase in oil prices.

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