Is the sudden spike in gas prices really justified or just gouging?

Mar 4, 2015, 5:23 AM | Updated: 8:34 am
A dramatic rise in gas prices over the past few weeks have some questioning the real reason for the...
A dramatic rise in gas prices over the past few weeks have some questioning the real reason for the sudden spike. (AP Photo/File)
(AP Photo/File)

The average price of a gallon of regular unleaded has climbed to $2.93 in the Seattle area. That’s 35 cents more than just a week ago, 60 cents higher than just a month ago.

It’s been a rude awakening for all of us enjoying record low prices in recent days.

At the Juanita Firs 76 station in Kirkland, owner Dan Amundsen is used to the price of gas starting to rise this time of year.

“Just about every year for I don’t know how long, this is the season when the price goes up,” says Amundsen.

Jennifer Cook at AAA of Washington says it’s fairly predictable.

“Spring time is when refineries slow down their production and switch from winter fuel blends to summer fuel blends, which are more expensive to produce. But during that time they slow their production, which puts pressure on supply,” says Cook.

A recent fire at a refinery in Southern California has also had an impact on the supply of gas along the West Coast, causing prices to climb.

But in all the years Amundsen’s owned the station, he’s never seen such a run up in such a short amount of time.

“Last week, we had a 16-hour period where the cost of fuel jumped 25 cents in just that 16 hours,” Amundsen says. “Twenty-five cents equates to almost $2,800 on my next load of fuel. You can’t afford to just keep digging that out of your pocket. You have to find a way to pass that on or you go broke.”

The big and sudden price hikes are raising eyebrows throughout the industry. No one wants to flat out accuse the refineries of gouging their customers. But Tim Hamilton, the Executive Director of the Washington state-based Automotive United Trade Organization, says the recent run-up defies explanation

“The price increases we got far exceed any change in taxes and far exceed any change in the crude oil price, so this increase in price is basically an increase in profit for the refiners,” he says.

Oil companies consistently refuse to comment about the fluctuating prices. Hamilton, who represents gas station owners across the state, says god forbid anyone ask.

“All we can tell you for certain is that the dealer who has the gas station gets notified the price has moved and if he asks why, they hang up.”

No one can predict how high the prices will go. AAA’s Cook says prices tend to continue rising throughout the summer driving season. At least there’s a silver lining, if you look for it.

“The good news is we’re still 70 cents lower than we were at this time last year,” says Cook.

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Is the sudden spike in gas prices really justified or just gouging?