ARIZONA, USA — Gas prices are up another 8 cents on Tuesday, with the average price for a gallon of gas in Arizona up 20 cents from a week ago, according to AAA. It’s now more than $4.18 a gallon statewide.
In Phoenix, gas prices are now 50 cents higher than they were a month ago, taking a toll on people’s budgets and gas sellers’ pockets. Now, an economist with ASU is expecting these higher prices to stick around for a bit.
Higher prices, tighter budgets
Pulling up in a blue-gray truck, Jose Najar said the prices at gas pumps are taking a toll.
“This guy has a big tank,” Najar says, motioning towards the truck, which holds 40 gallons of gas.
With gas prices inching up for a few weeks and are now at an average of $4.48 in Maricopa County, according to AAA, Najar has been picking up extra side jobs to help offset the gas for his truck.
“I have to be careful with my spending now,” Najar said. “Before, I could do $40 to $50 bucks no problem, now it’s like I gotta put in a little more extra.”
Why now?
A couple of weeks ago, refineries in California had some issues, but prices haven’t gone back down since then. They’ve gone up.
“It would suggest to me that we've got refinery issues coming out of Torrance and supply chain issues with fuel coming out of California,” Dennis Hoffman, a longtime economics professor with ASU, said.
Hoffman said the wholesale price of gasoline is about where it was in the first week of January but notes gas prices are about 75 cents higher now than they were at that time.
Overall, Hoffman said there’s a lack of investment in refineries.
“People that would be investing money today in oil and gas and gas distribution or refineries. What are they hearing? They’re hearing that, you know, in the next decade or so, everybody’s going to be buying electric vehicles,” Hoffman said.
Gas is unlikely to get back to the lower prices of below $3.00 a gallon, Hoffman said. He believes that we’ll have brief moments of those low prices, but again said it wouldn’t last because of the lack of investment in refineries.
Hurting gas sellers too
The costs at the pump are hurting gas sellers too.
“I think our price today is $5.00,” Jaswinder Singh, who owns a gas station at 20th Street and Osborn Road with his wife Ramandeep Kaur, said.
Signh and Kaur had previously kept their gas prices below $5 a gallon over the highs of the summer to help the community and are still keeping them lower than cost.
“We’re still selling like $4.49,” Singh said.
Singh said they’re keeping prices as low as they can to continue to help the community, holding out hope that prices will get better soon after the winter blend switches over. But, Singh said he’s unsure how long they can do that as they’re working on starting up a non-profit to offer free rides to seniors.
“Hopefully, maybe in a couple of weeks, they’re going down again,” Singh said.
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