Gasoline Prices Spiking Earlier Than Usual, Yet Again

This is getting to be like a broken record. Once again average gasoline prices are increasing earlier than is typical, with the national average for a gallon up nearly 40 cents in the past month alone. Foodservice operators are worrying that the spike, on top of the increase in the payroll tax Jan. 1, will undercut spending on restaurants. They have some early evidence: The foodservice component of advance retail sales was flat in January, according to the Commerce Department.

Average gas prices nationwide jumped more than 10 cents in the last week alone, according to data from AAA’s Daily Fuel Gauge Report, updated Feb. 17. What’s a bit confusing about the increases, and their intensity, is that it’s not about crude oil prices, though there is worry about Iran’s nuclear program and the potential for a big disruption in supply in the Middle East. Crude prices have been fairly stable. And gasoline inventories also are at reasonable levels in most areas of the country.

The cause is primarily an aggressive schedule of refinery maintenance that has taken production capability off-line, particularly in areas of the country that must use special blends, including California, the Northeast and the Midwest around Chicago. Average prices in those areas are running above $4 a gallon. Whether prices will moderate as the summer driving season approaches is anyone’s guess, but in the meantime the higher prices almost certainly will impact restaurant sales.