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Why have gas prices increased? Will they go down?

Gas prices
Posted at 6:24 PM, Feb 23, 2021
and last updated 2021-02-23 18:26:49-05

BUFFALO, N.Y. (WKBW) — Over the past week, gas prices have skyrocketed in Western New York and across the country. Several factors are contributing to this. Some factors will improve, others are here to stay.

"Unfortunately, we're paying some of the highest prices we've seen in the past year. It doesn't look like we're going to be seeing any cheap prices any time soon," Elizabeth Carey, director of public relations and corporate communications for AAA Western and Central New York, said.

Gas is about $2.66 per gallon on average in the Buffalo area this week. That's a $0.14 increase from just one week ago. The last time it cost this much to fill up your tank was October 2019.

"During the pandemic, factories were shut down, people weren't driving. People really quarantining last spring. That just drove oil prices right into negative territory," Carey said.

Oil and gas prices dropped at the beginning of the pandemic. Supply was plentiful, but demand was not.

"So OPEC scaled back, U.S. oil producers scaled back, every producer cut output. Now, as we start to see recovery, that's a problem. They have not responded much to the increase in demand. That's why oil prices today are $62 a barrel, not $35 a barrel like they were last Halloween,"
Patrick DeHann, head of petroleum analysis at GasBuddy said.

Couple that with the crippling winter storm in Texas and gas prices soared.

"40% of crude production was shut down because all of these refineries closed down. Once they operate again, they're up and running, the situation resumes at these refineries in Texas, the prices should come down," Carey said, "However, oil prices continue to rise so we don't expect gas prices to get much cheaper. We expect oil prices to continue to rise in the coming months."

While gas prices will come down, they may not drop as low as the $2.55 a gallon seen last week.

"Say prices come down $0.07 or $0.08. Then they'll slowly creep up. As we get to summer, prices are going to increase then as well because many switch over to the summer blend of fuel. It's more expensive to make than the winter blend of fuel. Of course demand is always higher in the summer months so we don't expect any cheap gas prices any time soon," Carey said.

To save on gas, experts said to do your research.

"If you're not shopping around, you're probably flushing money down the toilet," DeHann said.

Experts said to explore different gas prices online or through free apps like GasBuddy or the AAA Mobile App. It could save you up to $00.50 per gallon.