Chattanooga gas prices jumped an average of 9.9 cents a gallon in the past week to their highest level in nearly two years as oil-producing nations continued to limit fuel production.
Meanwhile, travel and gas demand is growing, as the COVID-19 pandemic shows signs of easing.
Motorists will face even more pain at the pump this spring unless OPEC nations boost output, experts say. The online gas tracking service GasBuddy.com projects U.S. gas prices could average $3 a gallon in the next month - the highest springtime levels since 2014.
"OPEC surprised oil markets last week by extending oil production cuts for another month, ignoring the resurgence in global demand as economies recover from COVID-19," said Patrick De Haan, head of petroleum analysis for GasBuddy. "As a result, motorists should prepare for further gas price increases in the weeks and potentially months ahead, with a $3 per gallon national average potentially less than a month away."
Gas prices in Chattanooga are 38.9 cents per gallon higher than a month ago and stand 47.6 cents per gallon above what they were a year ago. Gas prices in Chattanooga on Sunday averaged $2.50 a gallon, according to GasBuddy's daily survey of 170 stations in Chattanooga.
To fill a 15-gallon tank in a typical car, motorists are now paying $37.50 in Chattanooga, or $8.55 more than what they paid at the start of 2021 when local gas prices averaged $1.93 a gallon.
GasBuddy.com said gas prices in Chattanooga remain 27 cents a gallon below the U.S. average of $2.77 per gallon for regular gas and a nickel below the statewide average in Tennessee of $2.55 per gallon. But local prices at the pump rose faster than the U.S. average last week.
According to AAA, gas prices across all of Tennessee rose an average of another 8 cents a gallon last week to $2.58 a gallon. AAA said Monday that the average price of regular fuel in Tennessee is 35 cents a gallon higher than a month ago and 41 cents a gallon more than the price a year ago.
"With refinery utilization at a record low, gasoline supplies tightening, demand modestly increasing and crude prices on the rise, cheap prices are in the rearview mirror for the immediate future," said Megan Cooper, spokesperson for AAA-The Auto Club Group.
Tennessee gas prices are the highest they have been since May 2019. Tennessee still boasts the 9th lowest average gas price among the 50 states with a price 19 cents a gallon below the U.S. average, according to AAA.
The lowest price for regular gas in Chattanooga on Monday was at a Circle K station on East Brainerd Road, which is selling regular gas for $2.21 a gallon.
Oil prices rose 12% last week after OPEC surprised many energy analysts with its decision Thursday not to increase production in April. Prices continued to accelerate on Friday after the government's monthly unemployment report showed the economy added more jobs and the new cases of coronavirus infections and hospitalizations continue to decline or plateau. On Monday, oil prices initially jumped above $70 a barrel on reports of a drone attack on Saudi oil infrastructure, but they fell later in the day.
"At the start of this year, it was somewhat outlandish to predict a $3 per gallon national average for the summer driving season, but thanks to the speed of recovery from the pandemic pushing demand higher and OPEC's reluctance to raise oil production, we're on the cusp of making that a reality," DeHaan said.
"It's extremely frustrating as a consumer to feel helpless as prices soar and as millions remain unemployed, so the only advice I can offer consumers is be prepared for further increases and, to mitigate rising prices, shop around for the low prices every time you need to refuel."
The Associated Press contributed to this story.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.