Ukraine crisis doesn’t factor greatly into gas prices

Mar. 26, 2014 @ 03:51 PM

Are you paying more recently at the pump to fill the tank of your car or truck? The ongoing crisis in the Ukraine isn’t the main culprit, a petroleum industry analyst says.

Instead, the recent rise in the price of gasoline relates to factors that come into play each year at this time — a change by refineries in their blends of fuel and an expectation of greater travel with impending warmer weather.
The crisis in the Ukraine, sparked by the Russian government’s takeover of Crimea, caused an initial spike in oil futures earlier this month, said Whitney Berongi, a spokeswoman for AAA Carolinas out of Charlotte.
But because Russia hasn’t used its extensive petroleum reserves as economic retaliation against the United States and western Europe, the impact of the Ukrainian crisis has been limited in international oil trading, Berongi told The High Point Enterprise. Russia is the second-leading global oil exporter behind Saudi Arabia.
“What’s going on in the Ukraine is having a minimal effect on gas prices,” she said.
But gas prices have been increasing. In the greater High Point area, the average for self-service unleaded was $3.42 a gallon on Wednesday, up 8 cents a gallon from a month ago, according to AAA Carolinas. However, local gas prices are better off than a year ago, when the average was $3.63 a gallon.
“What you probably are seeing with gas prices going up is that we are getting ready to switch over to summer blends, which happens (at refineries) every spring,” Berongi said.
The blends are a different variation of gasoline designed to cut down on smog and pollution during the hottest months of the year.
“Refineries have to shut down and change over the blends and do maintenance, and that causes a spike in the gas prices. It does that every single year,” Berongi said.
Another reason for higher gas prices is an expectation of greater travel with the end of winter and the onset of nicer weather during the spring, she said.
AAA Carolinas doesn’t have an outlook on how high gas prices will reach, though the summer blends need to be in place by May, Berongi said.
In international trading Wednesday, the price of oil rose above $100 a barrel. Benchmark U.S. crude increased $1.07 to $100.26 a barrel on the New York Mercantile Exchange.

pjohnson@hpe.com | 888-3528