Why gas will cost more in CT on Labor Day holiday weekend

Jan 29, 2024

As travelers take to the road for the Labor Day holiday weekend, average prices for regular unleaded gas in Connecticut are hovering at their highs for the year, having jumped 20 cents a gallon in the last month alone.

The average price for a gallon of regular gas in Connecticut was $3.82 as of Wednesday, essentially unchanged from the prior week, and still below $4 a gallon at the same time a year ago, according to AAA. So, prices — up from $3.16 at the beginning of 2023 — may be showing signs of cresting.

The price in Connecticut was 2 cents below the national average of $3.84, according to AAA. In Hartford, the average was $3.80.

But experts caution that gas prices could resume their march upward in September as the hurricane season hits its stride. Hurricanes have the potential to disrupt the supply of gasoline because refineries can be shut down for periods at a time, they say.

“That’s always the unknown as we come into the hurricane season,” Tracy E. Noble, a AAA spokeswoman, said. “There could be any number of fluctuations at the pump. So that’s why it remains a very volatile situation.”

Forecasters at the National Oceanic and Atmosphere Administration recently increased their predictions for this year’s Atlantic hurricane season to “above normal” tied to record-warm sea surface temperatures. The organization now expects 14-21 named storms, with between 6 and 11 developing into hurricane strength.

This week, the National Hurricane Center is tracking Tropical Storm Franklin, which could develop into a hurricane and enter the Gulf of Mexico. Hurricanes battering the Gulf Coast are of particular concern when it comes to gas supplies because of refineries that could get knocked offline, particularly along the Texas coast. When supplies tighten, gas prices are likely to rise.

Tom Kloza, global head of energy analysis at the Oil Price Information Service, a gas and oil-reporting agency, said he also is keeping an eye on two refineries that will be shutting down for maintenance for two months this fall, one in Philadelphia and the other in New Brunswick. Both are major suppliers to New England and the Mid-Atlantic regions.

The shutdowns alone won’t necessarily push up gas prices, but another major refinery temporarily taken out of production because of a hurricane could spell an uptick for gas prices in Connecticut and throughout the Northeast.

“If you’ve got two on the sideline — and it’s kind of like if you have an offensive line — and two guys go down and, you know, that third one goes down, you’re in real trouble,” Kloza said.

The good news for consumers, Kloza said, is that demand for gas typically goes down in the fall, leading to lower gas prices. Gas also can be produced more cheaply in a “winter blend” that can’t be used in the hot summer months because it is less environmentally-friendly when it comes to emissions, Kloza said.

The price of oil, which accounts for about half the cost of gas, also has been rising steadily since June, contributing to a spike in prices at the pump. The price of oil has hovered around $80 a barrel, up from $70 in the past month. The increase is driven, in part, by high demand for jet fuel amid a strong air travel season this summer.

Some analysts, including those at investment bank UBS, recently forecast that oil could top $90 a barrel by the end of 2023.

Kloza said he doesn’t foresee oil rising anywhere near $100 a barrel that was seen right after the Russian invasion of Ukraine, sending gas prices soaring above $4 a gallon.

In East Hartford recently, Chai Alicea was pumping regular unleaded gas into her 2003 Honda Pilot at the Mobil station on Silver Lane. Alicea was keeping an careful eye on the digital price counter, quickly clicking off the nozzle at $50. Alicea knows the tank isn’t full, but that is what she is budgeting for gas right now for each fill-up.

“It’s pretty rough cutting into other budgets to cover the gas prices right now,” Alicea, a Manchester resident, said. “It’s frustrating. We’ve definitely had to cut corners in the grocery budget. We’ve had to cut back a little more on that, being mindful about not overusing.”

The price of regular unleaded at the station — $3.89 for cash and $3.99 for credit — isn’t deterring Alicea’s family’s plans for Labor Day. But carpooling and passenger kicking in for gas would be a definite change this year, Alicea said.

Gasoline prices also can be affected by factors well beyond supply and oil prices as is evidenced by the wide range of pricing throughout Connecticut.

AAA’s Noble said there can be other factors at play, including distance from entrances and exits to highways. A gas station near a highway could sell gas at a higher price with travelers willing to pay the price for the convenience. But Noble said similarly located gas stations could price gas lower because of the “sheer volume” of customers.

The intensity of competition in the surrounding area also can influence pricing, Noble said.

A gas station that is also paired with a convenience store could allow an operator to offer lower gas prices. The difference with another competitor can be made up by sales in the store, Noble said.

Noble said undercutting gas prices also can be seen at the larger convenience store chains where some use the strategy of offering the same price for cash and credit.

“Whereas your Mom and Pop gas station is going to have different prices for cash and credit because those credit card fees are affecting them more than somebody who can offset it with larger convenience store offerings,” Noble said.

Kenneth R. Gosselin can be reached at [email protected].

Sign up for email newsletters