Farmington sees reprieve from state's highest gas prices, but is the party already over?
Prices shot up by 30 cents a gallon earlier this week after months of decline
- The average price of a gallon of regular unleaded fuel in Farmington was $3.28 a gallon on Jan. 19.
- That was the second-lowest price in the state among New Mexico’s four metropolitan areas and less than the statewide and national averages.
- Just a few days later, prices rose dramatically.
FARMINGTON — Drivers in the Farmington area, long accustomed to paying the highest gasoline prices in the state, finally found themselves at the other end of the equation last week.
According to the AAA New Mexico Weekend Gas Watch released on Thursday, Jan. 19, the average price of a gallon of regular unleaded fuel in Farmington was $3.28 a gallon — the second-lowest price in the state among New Mexico’s four metropolitan areas and less than the statewide and national averages.
But those relatively low prices were short lived. By Monday, Jan. 23, gas prices in the Farmington area had surged by approximately 30 cents a gallon, meaning the slow-but-steady reduction in prices local drivers have seen since late last spring appears to be over, for now.
The Farmington average of $3.28 a gallon on Jan. 19 was just a penny more per gallon than the $3.27 a gallon that drivers in Santa Fe were paying, which was the lowest price in the state. Las Cruces drivers were paying $3.33 a gallon, and Albuquerque drivers faced the highest prices in the state at $3.40 a gallon. The statewide average was $3.33, while the national average was $3.38.
The pain that Albuquerque drivers were experiencing last week is something Farmington motorists have grown used to. Since December 2020, when gas prices began rising again after collapsing during the height of the COVID-19 pandemic, Farmington consistently has seen the highest gas prices in New Mexico, with Farmington drivers sometimes paying close to $1 a gallon more than their counterparts in other parts of the state.
Farmington gas prices peaked on June 11, 2022, when the average price here hit $4.99 a gallon, an all-time high. While the price at the pump quickly declined in other parts of the state, prices here remained stubbornly high throughout the summer, prompting Farmington Mayor Nate Duckett to ask the New Mexico Attorney General’s Office to investigate the matter.
Analysts have said that Farmington’s gas prices often differ from those in other parts of the state because the city is served by a different supply chain than most other parts of New Mexico. But Joshua Zuber, a public affairs specialist for AAA Texas/New Mexico, said other factors can have an impact on the price at the pump, explaining that it is retailers who ultimately determine what consumers will pay.
Gas prices in Farmington continued to fall for the past few weeks even as they bottomed out and began to rise across the rest of the state. The $3.28 average price in Farmington on Jan. 19 was less than the $3.30 it saw on Jan. 12, even as the price in Albuquerque rose 35 cents in that time from the Jan. 12 price of $3.05. A week before that, on Jan. 5, the Farmington price had been $3.38 a gallon while the price in Albuquerque had been $2.99.
Zuber said market watchers are attributing the rapid increase in prices in recent weeks to the decision by Chinese leaders to lift many of the country's COVID-19 lockdown restrictions, a move that is expected to significantly increase demand for gasoline worldwide
“So the outlook is optimal for oil to demand to increase in that region,” he said.
Another factor that continues to influence the price of crude oil — and the price of gasoline down the line — is the war in Ukraine, he said.
But two other factors that have impacted gas prices in the recent past appear to not be having much of an effect currently, Zuber said. Barring another significant outbreak of the virus in this country, Zuber said, COVID-19’s impact on gas prices largely seems to have run its course. And aside from a few interruptions to refining capacity and fuel deliveries earlier this season because of severe storms, winter weather hasn’t played much of a role in prices, either, he said.
Demand for gasoline in the U.S. largely has been flat or headed downward since April 2022, which is perhaps one reason why prices had been going down steadily since June. In fact, according to figures from the U.S. Energy Information Administration, since July, the four-week average for U.S. demand has run between 1 million barrels and 500,000 barrels a day less than it did for the same period a year earlier. U.S. demand has not exceeded the previous year’s demand since April, and demand currently is at its lowest level since March 2021, when the pandemic was continuing to keep many Americans confined to their homes.
Despite a recent uptick — demand had increased by approximately a half-million barrels a day between Dec. 30, 2022, and Jan. 13 — U.S. demand still was approximately 170,000 barrels a day less than it was a year earlier, according to the EIA.