2012-06-20 / Features

2005

Gas Prices Trend Lower, Still Surpass 2005 Levels

n August 2005, according to AAA figures, the average price of a gallon of regular gasoline was $2.587, a gallon of gasoline in the middle octane rating range was $2.768 and a gallon of premium gasoline cost $2.82. A gallon of diesel fuel averaged $2.745. The highest recorded price of a gallon of regular unleaded gasoline was $2.592 as of July 28; as of July 22 the highest recorded price of a gallon of diesel fuel was $2.756. A year earlier, a gallon of regular gasoline cost $2.177, mid-range octane rating $2.329 and premium $2.378. Diesel fuel was $1.992 per gallon.

Despite the bite gas prices took out of their wallets, New York City residents did not plan to curtail their driving to any great extent. According to a nationwide survey conducted by the American Automobile Association (AAA) in March 2005, asking how high gas prices would have to go before motorists started making concessions such as shorter trips, car pooling, taking public transportation and other conservation and money-saving measures, 43 percent of the survey respondents said they had already undertaken such measures, for the most part in their commutes to work.

Seven years later, gas prices peaked in February and March 2012, then began to decline in April. As of April 28, gas prices in Queens ranged from a low of $3.99 a galllon at a Gulf station at Metropolitan and Admiral Avenues in Middle Village to $4.65 a gallon at a Mobil station on the Grand Central Parkway near Francis Lewis Boulevard in Flushing. Analysts attributed the rising prices mainly to tensions in the Middle East, rising crude oil prices and market speculation, along with signs of an improving U.S. economy.

The Federal Trade Commission has also been investigating to see if the nation’s gas prices have been kept artificially high. U.S. Senators Charles Schumer (D-New York), and Claire McCaskill (D-Missouri) have been pushing the FTC to finish its investigation so that prices could be reduced if there is evidence they’re being inflated only for profit. Their worries seemed groundless when the price for one of the most common types of gasoline futures traded in New York has dropped 30 cents, going from over $3.40 a gallon at the beginning of April to $3.10 a gallon on April 25.

Futures contracts are financial instruments that buyers and sellers of large amounts of gasoline— or any commodity—use to set prices. The current drop in gas price futures should begin to appear in gas prices at the service station over the next few weeks analysts say. However, the retail per-gallon price decline might not be as precipitous as that seen in the futures markets.

Also keeping gas prices at levels above those that caused drivers concern in 2005 are the taxes levied on a per-gallon basis in New York state. New York ranks first in the nation in gas taxes, slightly higher than California and Connecticut, according to April figures compiled by the American Petroleum Institute.

On average, New Yorkers pay taxes totaling 69.6 cents a gallon, The Empire State tops each of the 16 other states that charge more than the national average of 49.5 cents per gallon in taxes.

New York state’s nation-leading fuel fees stem from a brew of seven federal, state and local taxes unlike any other in the United States. New York charges five taxes per gallon of gas: a motor fuel excise tax, a petroleum business tax, a state sales tax capped at eight cents a gallon, a petroleum testing fee tax and a spill tax. Together, they add up to 34.05 cents on a fuel pump price of $3.90 a gallon. Counties and local governments in New York collect sales tax revenue from gasoline purchases on a percentage basis that averages 14.4 cents a gallon statewide, but depends on the location and pump price. New York is also one of only eight states to levy sales taxes on gasoline, according to Robert Sinclair, spokesman for the American Automobile Club of New York. Sinclair noted that the revenue realized goes into the general fund. None goes towad motor-related issues.— Linda J. Wilson

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