New Mexico gas prices still increasing, but could begin to decline this fall, AAA says
Relaxation of pandemic restrictions has led to increased demand
FARMINGTON — The surge in gasoline prices that motorists across New Mexico and the United States have seen this year was not unexpected, with market analysts predicting late last year that such an increase was likely as the effects of the COVID-19 pandemic began to recede and normal activity resumed.
But an end to those price hikes finally could be in sight, with demand for fuel expected to peak this month before starting to decline in September, according to a spokesman for AAA Texas/New Mexico.
Daniel Armbruster, a public affairs specialist for the organization, said it has been a robust summer driving season across the country, with many families taking advantage of relaxed COVID-19 restrictions to hit the road. Many people who were avoiding their normal commute by working from home for the last several months of last year also have returned to the office in 2021, he said.
Those factors have led to much higher demand for gasoline, and that has meant much higher prices at the pump than motorists were paying in early December 2020, when demand was being severely tamped down by the pandemic.
"It's a combination of both," Armbruster said of the steady rise in gas prices for the last eight months.
The average price of gas in New Mexico
According to the weekly AAA Weekend Gas Watch released Aug. 5, the statewide average gas price in New Mexico is $3.10 for a gallon of regular unleaded fuel. That represented an increase of 1 cent over the previous week and a hike of $1.07 over the same date in 2020. The national average is $3.19.
The AAA survey states those numbers correspond with increased demand. Figures compiled by the U.S. Energy Information Administration for the week ending July 30 show that demand increased by 5% over the previous week, which Armbruster described as a healthy but not unprecedented jump.
"If demand stays up like it is, we're going to continue to see incremental increases at least for a few more weeks," he said. "But this is the peak of it now."
Armbruster said vacation bookings made through AAA were up 15% in June compared to June 2019, which was a record year for travel. But with the traditional vacation season coming to an end soon, demand could begin to decline, and that may lead to an end to the long period of increases, he said.
Historically, prices begin to decline in September or October each year, he said, explaining that falling demand, as well as the production of winter blend gasoline, which is cheaper to produce, contribute to that dynamic.
"We expect that to happen (this year)," he said. "There's nothing that says that won't happen."
How much are Farmington gas prices?
Prices have increased for nearly eight months. On Dec. 14, motorists in Farmington were paying an average of less than $2.04, but the average price for the city in the Aug. 5 survey was $3.29 — an increase of $1.25 a gallon or 62%. The record average price for Farmington, according to the survey, is $4.15, a mark established on July 15, 2008.
The average price in Farmington remains the highest among the state's four metropolitan statistical areas, just as it has for most of 2021. Drivers in Albuquerque were paying the least at $3.06, while Santa Feans were paying $3.13 and Las Cruces motorists were paying $3.19.
Armbruster acknowledged that it has been a bit unusual for Farmington to consistently post the highest gas prices in the state. But he noted that kind of dynamic occurs in other parts of the region, as well. For instance, he said, the price of gas in El Paso consistently is higher than it is in the rest of Texas.
He also said that while prices may seem unusually high now, they are not terribly out of line with what consumers have seen in recent years. There were times in 2018 and 2019, he said, that the average gas price in New Mexico reached the neighborhood of $2.75 or $2.80 — not far from the average of $3.10 the state saw this week.
"There's not a big gap there," he said.
Mike Easterling can be reached at 505-564-4610 or firstname.lastname@example.org. Support local journalism with a digital subscription.