Chattanooga motorists had plenty of reason to cringe as they pulled into area gas stations Friday morning: Gas prices spiked 10 cents or
higher from the day before.
On Friday, Chattanooga's average gas price was $3.21 per gallon for regular gas, according to AAA, while Tennessee's was $3.16 and Georgia's was $3.20.
Prices are about 60 cents up from prices for regular gas one year ago and up about 70 cents for diesel.
Experts attribute the price surge to the political unrest in the Middle East.
"It's the uncertainty caused by the turbulence in the Middle East that pushes gas prices up," said Ziad Keilany, head of the economics department at University of Tennessee at Chattanooga.
Countries such as Tunisia, Egypt and Libya are not major oil-producing countries, but the fear that the violence now erupting in them could spread to major oil nations such as Saudi Arabia and Iran is enough for panicked price jumps, he said.
BY THE NUMBERS
For every $1 spent on gas at the pump, the breakdown is:
Source: U.S. Department of Energy
Gas price averages in Chattanooga metro area
Regular - Diesel
Saving dollars at the pump
Kensington, Ga., resident Cindy King said Friday that the high prices forced her to try to stay off the roads.
"I'm only putting $7 or $8 in it - that's all you can afford," she said. "You try not to come out unless you need to."
In the Chevron station at the intersection of Highways 193 and 136 in Walker County, she pumped 1.8 gallons into her Dodge Ram before the pump hit $6 and she cut it off.
A few feet away, Kramer Pressnell, from Lookout Mountain, said he was buying a quarter of a tank Friday but knew that pulling a trailer behind his V8 Toyota Tundra would probably force him back to the pump Saturday.
"I'll just go $20," he said, standing near the station's sign advertising the $3.28 price for a gallon of regular. "I can't afford it."
The price hikes go back to demand for crude oil, according to AAA spokesperson Jessica Brady. The closing price for oil this Friday was $97.88, more than $10 higher than it closed last week. As oil costs spikes, retail gas prices will follow suit, she said.
Because of the volatile Middle East, Brady said "it's impossible to predict what's going to happen" with gas prices, although she said experts anticipate a continued price climb over the next several weeks.
"The prices of oil are always unpredictable, but you add (the violence) and it's 10 times harder to forecast," she said. "It's possible we could see $4 a gallon sooner than later. It's possible things could miraculously calm down."
Keilany said current prices posted at gas station aren't the most up-to-date reflection of the global market.
"We're seeing the effects of the shock of what happened two days ago" in Libya, he said.
Libya is the ninth-largest oil producer in OPEC.
"The initial shock pushed the price upward, but they've started dropping," he said. "But wholesalers and retailers will take advantage of these high prices as long as they can."
He predicted that the prices will begin to recede and level out again over the next two to three weeks.
"The market may realize that it has overreacted," he said.
Local companies are wary of the dents that rising fuel costs will gouge in their budgets. Chattanooga-based trucking company U.S. Xpress uses 12 million gallons of diesel per month to fuel 8,000 trucks across the country, according to company spokesman Greg Thompson. Besides personnel costs, fuel is the company's largest single expense.
"We're paying 70 more cents per gallon than we were a year ago," Thompson said. "That definitely has a negative impact. If our costs go up for fuel, we have to pass that cost along to our customers," he said.
Staff writer Andy Johns contributed to this story.