April 23, 2018
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Price of gas starts annual ascent

By Rich Hewitt, BDN Staff

The price of gasoline has started its annual creep upward throughout the state.

The average price for regular gasoline in Maine this week is $2.89 a gallon, according to AAA reports. That’s slightly higher than the national average of $2.86 a gallon, which is almost 7 cents higher than a month ago and about 62 cents higher than this time last year.

In Bangor this week, prices varied from a high of $2.92 to a low of $2.75.

“There’s been a little increase in the seasonal demand,” said Patrick Moody, the public affairs director for AAA Northern New England in Portland. “And there is a switch from winter blend to summer blend fuel.”

Federal environmental regulations require that gasoline sold in summer include additives to inhibit evaporation, which can add 10 to 20 cents to the cost of a gallon of gasoline, according to the U.S. Energy Information Administration website

The cost of gasoline at the pump reflects several main components: the cost of crude oil; refining costs and profits; distribution costs and profits; taxes; and retail profits.

Moody also noted that crude oil prices hit an 18-month high early in April, driven mainly by international demand, particularly in China. Although the per barrel price has dropped slightly since then, the overall increase has contributed to the steady rise in prices at the pump, he said.

The price of crude oil is the single biggest factor in the price of gasoline, accounting for more than half of the per gallon cost. Refining costs can vary based on the quality of the crude oil. Transportation costs depend on the distance from the refinery to the terminal and on local delivery distances.

Federal and state taxes are added on top of those costs. Maine’s gasoline tax is the 15th highest in the country, according to the American Petroleum Institute. Including the federal tax of 18.4 cents per gallon, Maine drivers pay about 49.4 cents in taxes for each gallon of regular gasoline.

Retail dealers have said they also have to cover a charge from credit card companies that can run as high as 7 cents a gallon. Credit card sales account for about 65 percent of their sales, they said.

With higher crude prices and an anticipated slight increase in domestic demand, it appears that motorists again will be paying higher prices for their gas this summer.

The monthly average gasoline price is expected to peak at about $2.97 a gallon in the early summer, according to a recent report from the U.S. EIA, which is a branch of the federal Department of Energy. Average U.S. pump prices likely will exceed $3 a gallon at times during the spring and summer driving season, which the agency lists as April through September.

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