Gas prices in New Mexico jump 19 cents, largest increase in at least two years
Higher prices could be on way unless supply of crude oil increases
- The average price for a gallon of fuel in the state on Feb. 10 was $3.48 a gallon, up from $3.29 on Feb. 3.
- Motorists in Farmington were paying the most for gas at $3.67 a gallon on Feb. 10.
- That was an increase of 11 cents from the previous week's average price and a jump of $1.29 from a year ago.
FARMINGTON — Drivers across New Mexico experienced a shock at the gas pumps last week as the average price of a gallon of unleaded fuel jumped 19 cents from the previous week — the largest single-week increase since at least January 2020.
The AAA New Mexico Weekend Gas Watch released Feb. 10 showed the average price for fuel in the state was $3.48 a gallon, up from $3.29 on Feb. 3 and an increase of $1.10 from the same date in 2021.
Of the state's four metropolitan statistical areas, motorists in Farmington were paying the most for gas at $3.67 a gallon on Feb. 10. That was an increase of 11 cents from the previous week's average price and a jump of $1.29 from a year ago, according to AAA New Mexico.
The price hike coincided with an approximate 11% surge in gas demand from the previous week, according to the U.S. Energy Information Administration.
Daniel Armbruster, a AAA New Mexico spokesman, said the increased demand was attributed to the falling number of COVID-19 cases as the Omicron surge began to dissipate, an overall increase in travel and perhaps East Coast motorists taking the precaution of filling up their tanks ahead of a large winter storm that hit the region.
"I can tell you here at AAA, we're seeing travel bookings starting to pick back up," he said.
Those factors led to the price of crude oil hitting $90 a barrel this week, the highest price in seven years and $30 more than the August figure, the AAA survey reports. The price of crude oil and gasoline climbed significantly despite a slight increase in the weekly regional fuel supply and Gulf Coast refinery utilization, according to the survey.
Another factor that could be contributing to the recent increase in gas and oil prices is concern that Russia could react to possible Western sanctions over a feared armed conflict with Ukraine by withholding crude oil from the market, further pushing up prices, the AAA survey states.
But the report noted some market analysts are hopeful some of that pressure could be relieved if the Iran nuclear deal is renewed. That may result in the lifting of sanctions against that country and the possible return of Iran's oil production to the global market.
How much higher?
Armbruster said his research showed only one comparable one-week increase in the price of gas across New Mexico since January 2020, which was a month after prices began steadily increasing. He said there was an 11-cent, one-week increase in January 2021. Even that paled in comparison to this week's 19-cent hike.
Farmington drivers have paid the highest gas prices among New Mexico's four metropolitan statistical areas for most of the last two years. But there finally are signs that that disparity may be evening out, as prices jumped even more quickly last week in Albuquerque, Santa Fe and Las Cruces than they did here.
Santa Fe had the lowest average price this week at $3.38 a gallon, a 16-cent increase. Las Cruces and Albuquerque were next at $3.51 a gallon, a 17-cent increase for the latter and a whopping 29-cent rise for the former. On Jan. 20, drivers in the Duke City were paying only $3.16 a gallon, meaning prices there have climbed 35 cents in three weeks.
The national average at the pump this week was $3.48, 7 cents higher than the previous week and $1 more than a year ago.
Armbruster said it is too early to tell how much higher gas prices might go.
"There's a lot of uncertainty on what will happen because of what's happening in Russia and Ukraine and if there's another COVID variant," he said.
In the short run, perhaps over the next six weeks, Armbruster said market analysts expect prices to continue to go up "unless something changes to lead to a greater crude oil supply."
Despite the rise in gas prices over the last 27 months, prices have not approached their record highs — $4.08 for New Mexico, $4.11 for the entire country and $4.15 for Farmington, all established on July 17, 2008.
Given the volatility of the current market and the fact that demand for gas traditionally rises in the summer, further straining the market, the possibility exists that prices could approach record levels later this year.
"Anything's possible, but I think it's too early to say for certain that would happen," Armbruster said. "We are at seven-year highs for gasoline prices, but a lot could change before we get to that point."
In any event, the spike in prices could be more than a fleeting issue. The last time prices were this high, in 2014, they stayed that way from January through the middle of October, roughly a nine-month period, Armbruster said.
Mike Easterling can be reached at 505-564-4610 or firstname.lastname@example.org. Support local journalism with a digital subscription.