Chattanooga gas prices rose last week to their highest level in 14 months and motorists are likely to face even more pain at the pump this spring as a combination of higher oil prices and increasing travel continue to boost the cost of fuel.
The average price of regular gasoline jumped by another 6.9 cents a gallon in the past week to $2.28 a gallon, according to GasBuddy's daily survey of 170 stations in Chattanooga. Gas prices in Chattanooga are 14 cents per gallon higher than a month ago and 16.4 cents per gallon higher than a year ago.
But local gas prices remain 35 cents per gallon below the U.S. average of $2.63 per gallon for regular fuel, GasBuddy.com said in a report released Monday .
The cheapest gas in the Chattanooga area is being sold at Circle K and Murphy USA stations in Ooltewah, where regular fuel is priced at $2.09 per gallon at both stations. Six of the 10 service stations with the cheapest gasoline in all of Tennessee are in Hamilton County, also including the Circle K and Murphy USA stations in Soddy-Daisy and the Circle K and Raceway stations on Signal Mountain Road.
Winter storm fallout
Most of last week's rise in gas prices was due to the shutdowns of refineries and gas shipments in Texas where a winter storm shut down many roads and cut off power in much of the state. Patrick De Haan, head of petroleum analysis for GasBuddy, said motorists may get some relief in gas prices this week and next as refineries reopen and shipments are restored. But DeHaan said fuel prices are likely to head higher by this spring.
"The jump in price was the result of a dozen or so refineries, primarily in Texas, that were forced to shut down as the frigid temperatures threatened to wreak havoc on their exposed equipment," he said. "With the cold weather behind us, price increases should begin to slow later this week or next week, and so long as these refineries get back online in short order, we may see gas prices start to move back down in the next couple of weeks. However, as we near spring weather, we'll likely see another longer term rise in prices begin as refineries start to transition to summer gasoline, so motorists shouldn't jump for joy just yet."
Since reaching a low of $1.44 per gallon last April amid the business and travel shutdowns during the pandemic, the price of regular gas in Chattanooga has risen by more than 58% and prices are now at the highest levels for this time in February in any year since 2014.
The price of crude oil fell last spring as COVID-19 wrecked economies and stopped people from traveling. But oil prices are moving higher again as demand has picked up and OPEC has been slow to boost output again. Oil in mid-February hit $60 a barrel for the first time in over a year.
"Crude, not demand, has been the main factor driving gas price increases this year," says Jeanette Casselano McGee, a spokeswoman for AAA.
Price of electricity
In addition to the price of gasoline, electricity rates in Chattanooga will be slightly higher in March due to the monthly increase in the fuel cost adjustment by the Tennessee Valley Authority. But power bills should still be below a year ago with similar energy consumption.
EPB said the typical residential customer using 1,295 kilowatthours of electricity in a month should pay $138.35 for their March electricity bill in Chattanooga, up 58 cents from the rate for such power usage this month but still $1.25 cheaper than in March 2020.
TVA did not increase its base rates in the past year, but the utility adjusts a portion of its energy costs to reflect the price of fuel used to generate electricity each month.
"The overall system average fuel rate for March is approximately 16% lower than the three-year average March fuel cost," TVA spokesman Scott Brooks said. "The lower fuel rate is primarily due to expectations for lower projected sales in March."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.