Unrest in Iraq and talk of a increase in the gas tax have driven the average retail gasoline prices in Kansas up 6.8 cents per gallon in the past week, averaging $3.52 Sunday, according to GasBuddy’s daily survey of 1,329 gas outlets in Kansas. This compares with the national average that has increased 2.6 cents per gallon in the last week to $3.68.
Including the change in gas prices in Kansas during the past week, prices yesterday were 3 cents per gallon higher than the same day one year ago and are 10.7 cents per gallon higher than a month ago. The national average has increased 4.6 cents per gallon during the last month and stands 10.9 cents per gallon higher than this day one year ago.
Prices in Great Bend and Larned have hovered at $3.45 for several weeks. The lowest price in the state was reported in Newton at $3.27 and the highest in Hays at $3.89 (just off I-70).
“While concerns in Iraq have led to higher prices in many areas across the nation in the last week, a new concern has come to light: a possible increase in the federal gasoline tax,” said GasBuddy.com senior petroleum analyst Patrick DeHaan. “Suddenly, there are a few different situations that bear monitoring that could have an impact at the pump: Iraq, the Feds (raising gas taxes), and the peak of hurricane season, which is coming soon”
While this week at the pump could be a quiet one, especially if there’s no major Iraq news, motorists still face the threat of higher prices later in the summer, he said. “And watching lawmakers debate raising gasoline taxes certainly is worth monitoring.”
After falling for several straight days, the national average has increased for five consecutive days for a total of about two cents per gallon as violence in Iraq has intensified, AAA reported.
AAA has predicted that drivers will pay relatively high prices this summer, ranging from $3.55 – $3.70 cent per gallon, however this range may be higher if unrest in Iraq escalates or disrupts oil production in the region. Given the increase in crude oil prices to nearly a nine-month high, retail gas prices are likely to rise to or near the current 2014 high ($3.70 on April 28) in the coming days.
Gas prices often decline in June with the national average falling the previous three years at an average of about 20 cents per gallon. The recent turmoil in Iraq is likely to prevent that trend from repeating this year, AAA notes.
A year ago the national average was turning lower as domestic production and distribution issues eased, although market watchers were keeping a close eye on geopolitical tensions in Syria. While Syria is not a major oil producing nation, there was concern that fighting might spread to other countries in the region, which kept some upward pressure on crude oil prices.
Much of the attention of global market watchers has shifted from Ukraine and Russia, to widespread violence in Iraq. According to the U.S. Energy Information Agency, Iraq has the fifth largest proven oil reserve in the world and is the second largest producer of crude oil in the Organization of the Petroleum Exporting Countries.
Markets will continue to monitor the conflict closely due to the potential for violence to spread to neighboring oil producing nations, and the overarching regional foreign policy implications associated with an Iraqi civil war, AAA analysts said.