In the biggest weekly jump in gas prices since last spring when fuel costs rose to a record high, the average price of a gallon of regular gas in Chattanooga increased by more than 26 cents a gallon in the past week, according to GasBuddy's survey of 170 local stations released Monday.
Gas prices jumped above $3 a gallon for the first time in three months last week, rising to an average price of $3.13 a gallon in Chattanooga. GasBuddy said average gas prices in Chattanooga have jumped 53.4 cents a gallon in the past month and are now 18.9 cents a gallon above where they were a year ago.
"Macroeconomic factors have continued to weigh on oil and refined products, as strong demand in China hasn't been slowed much by a surge in new COVID cases," Patrick De Haan, head of petroleum analysis at GasBuddy, said in a report Monday. "In addition, releases of crude oil from the Strategic Petroleum Reserve have wrapped up. Concerns are increasing that without additional oil, supply will tighten in the weeks ahead, especially as the nation starts to move away from softer demand in the height of winter."
De Haan said motorists are likely to feel even more pain at the pump as spring approaches.
"Moving forward, it doesn't look good for motorists, with prices likely to continue accelerating," he said.
Chattanooga gas prices still average 26 cents a gallon less than the U.S. average and are the lowest of any major city in Tennessee, according to surveys by both Gasbuddy and the AAA. Fuel prices in Chattanooga also average more than $1.50 a gallon below the peak prices reached last June.
But AAA found that Tennessee and neighboring Georgia, where gas had been the cheapest in the nation, are among the top 10 states for the biggest increases in fuel prices over the past week. AAA surveys said the statewide average price of regular gas was up in both states by 18 cents a gallon last week to an average of $3.15 a gallon in Tennessee and $3.26 a gallon in Georgia.
Georgia's increase comes after the state fuel tax went back into effect this month, 10 months after Republican Gov. Brian Kemp suspended the tax to combat soaring prices last year, the Atlanta Journal-Constitution reported.
"We're seeing higher crude oil prices based on the belief that fuel demand will ramp up as China reopens its economy," Megan Cooper, spokeswoman for AAA-The Auto Club Group, said in a market report on gas prices Monday. "It's very likely that the volatility in our pump prices will continue again this week, and where prices go from here will be contingent on what happens in the oil market this week."
AAA said 15% of Tennessee gas stations are selling fuel below $3 a gallon. In Chattanooga, Gasbuddy.com said the cheapest gas Monday in Hamilton County was at the Citgo station at 7018 Shallowford Road where gas was priced at $2.89 a gallon Monday.
Gas prices across the state continued to rise over last week, climbing nearly 18 cents, on average. The Tennessee gas price average is now $3.15, 42 cents more expensive than one month ago and nearly 11 cents more than one year ago.
The higher prices for fuel don't appear to be dampening demand for gas. According to data from the Energy Information Administration, gas demand rose from 7.56 million to 8.05 million barrels a day last week. Meanwhile, total domestic gasoline stocks increased by 3.5 million barrels to 230.3 million barrels.