MANATEE -- The price of gas has jumped 45 cents since the first of the year and is the highest on record for this time of year -- an average of $3.73 a gallon. So will higher gas prices derail the economic recovery? Economists say not yet. They argue that the United States is in much better shape than early last year, when a similar surge in fuel prices weighed on economic growth by squeezing household budgets. Americans spent less on clothes, food and everything else. Rising gas prices hurt less when an economy is improving than when it’s slowing down. So economists expect other spending won’t be badly hurt, at least for now. If gas breaks its record of $4.11 a gallon, however, all bets are off. Driven by many of the same factors increasing fuel costs nationally, prices at the pump in Manatee also continue to climb.
The price for a gallon of regular unleaded gasoline in the Bradenton-Sarasota market rose 12 cents in the past week to reach an average of $3.81 Wednesday. That figure also represents an increase from the $3.56 a month ago and $3.41 from a year ago, according to AAA Auto Club South.
In fact, motorists in Manatee paid more for a gallon of gas last month than any February on record, and that trend is likely to carry over into March as tensions in the Middle East heighten fears of another war, AAA spokeswoman Jessica Brady said.
Local fuel prices also run higher than both the national and statewide average.
Floridians are paying an average of $3.75 per gallon this week, up 25 cents over the month and 40 cents over the year.
Local gas station operators say the steady increases have eaten away at already low profit margins, which now are hovering at just a few cents a gallon after credit card processing fees.
“It’s more difficult to be profitable when prices go up that much,” said Kevin Headlee, owner of the Creekwood Crossing BP station in Bradenton. “People drive less, and they take fewer trips so they buy less fuel. People want to take it out on the path of least resistance, so they look at us -- the independent station operators -- as the face of the oil company,” he said.
Each spring, refineries make the annual switch to their summer fuel blends, which are more costly to produce because of the required additives designed to curb pollution.
During that process, many refineries close temporarily for maintenance -- causing shortages of supply and pushing prices higher. Summer is also when demand typically reaches its peak.
The summer swap, coupled with mounting tension in the Middle East, will push prices upward though at least June, said Gregg Laskoski, senior petroleum analyst with GasBuddy.com.
The price of a barrel of crude oil closed Friday at $109.77 on the New York Mercantile Exchange -- $6.53 more than the week prior.
That’s the highest settlement since May of last year.
“It will all depend on what happens in the Middle East,” Laskoski said.
“If there’s a conflict -- no matter who starts it -- it’s almost a guarantee the oil commerce in the Persian Gulf will basically come to a standstill.”
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman