Chattanooga gas prices jumped by an average of nearly 12 cents a gallon in the past week, but refueling at the typical Chattanooga service station is still 35 cents a gallon less than the U.S. average, according to gas station surveys by the online fuel reporting service GasBuddy.com.
The average price of regular gas in Chattanooga rose 11.9 cents per gallon in the past week to $2.31 a gallon - the highest price in more than seven weeks. Gas prices in Chattanooga are 15.1 cents per gallon higher than a month ago, but they still stand 15.8 cents per gallon lower than what motorists paid here a year ago for gasoline.
Patrick DeHaan, head of petroleum analysis for GasBuddy, said the jump in prices at the pump reflects the impact from the attacks on Saudi Arabian oil fields, which knocked out 5% of daily oil production.
Saudi Arabia and the United States have blamed Iran for what appears to have been an attack by 18 drones and seven cruise missiles on Saudi oil facilities. Iran denies any involvement in the attacks, but Yemen's Iran-aligned Houthi rebels have claimed responsibility for the attack.
Following the attacks, oil prices saw their biggest daily jump in 30 years, but Saudi Arabia says oil production should resume as normal by the end of September.
"While the worst is now behind us, there remain some concerns that could cause oil prices to rise further, including a fairly optimistic timeline from the Saudis that may prove challenging to meet," DeHaan said. "Should time lines be extended, motorists may see additional slight increases."
A separate price survey across Tennessee released Monday by AAA showed gas prices across all of Tennessee rose an average of 13 cents a gallon in the past week to $2.40 per gallon for regular unleaded. That was still 27 cents a gallon below the U.S. average.
"The good news is we are seeing downward movement with crude oil prices and stabilization at gas pumps, but Americans can expect some fluctuation through the end of the month," said Jeanette Casselano, AAA spokesperson. "Should Saudi's crude production be back to full capacity shortly, the price spikes are likely to be temporary."
In its latest report, the Energy Information Administration (EIA) measured U.S. demand for oil at 8.9 million barrels per day, which is a substantial 900,000 barrels per day from the previous week and the lowest since February. The decrease in demand amid the spike in crude oil prices could help to keep gas price fluctuations more moderate through the end of the month, Casselano said.
At home, electric prices also will edge slightly higher in the Tennessee Valley next month as the Tennessee Valley Authority raises its monthly fuel cost portion of its power bills by 1.6% to its local power companies.
Despite the increase from the current rate, TVA's fuel portion of its electric rates will still be 17% below the average for October over the previous three years as cheaper natural gas, more hydroelectric and nuclear generation and greater efficiency measures help hold down fuel expenses. The fuel cost portion of TVA bills next month will be 9.7% below what it was a year ago.
"Actual fuel costs have been lower than forecast over the last three months," TVA spokesman Scott Brooks said.
Next month marks the start of another fiscal year for TVA and this year for the first time in 13 years, the federal utility is offering a way for its local power companies to reduce what they pay TVA by signing long-term agreements to qualify for an ongoing 3.1% rebate. TVA also is not raising its base rates in fiscal 2020 for the first time in seven years.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.
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