Chattanooga gas prices jumped Monday to the highest level in seven years as oil prices rose after OPEC decided not to raise production more than it already agreed to in July.
The average price of regular gas in Chattanooga increased by 14.9 cents per gallon in the past week to $2.95 per barrel, according to GasBuddy's daily survey of 170 stations in Chattanooga.
Steve Daniel, a Murfreesboro, Tennessee, motorist who spent more than $54 to fill up his Toyota Tundra in Chattanooga on Monday, said higher fuel prices aren't changing his travel plans.
"Gas prices go up and down, and I think once we see more electric vehicles on the road, they'll go back down again," he said.
Gas prices in Chattanooga are 13.5 cents per gallon higher than a month ago and now average $1.12 per gallon more than a year ago.
"Amidst what is turning into a global energy crunch, motorists are now spending over $400 million more on gasoline every single day than they were just a year ago," said Patrick De Haan, head of petroleum analysis for GasBuddy. "The problems continue to relate to a surge in demand as the global economy recovers, combined with deep cuts to production from early in the pandemic."
De Haan said gas prices could continue to rise as the holiday travel season approaches.
"If Americans can't slow their appetite for fuels, we've got no place for prices to go but up," he said.
Statewide, a AAA survey last week showed the average price of gas across Tennessee topped $3 a gallon, the highest since 2014.
U.S. oil prices finished above $80 a barrel on Monday for the first time since Oct. 31, 2014. Crude gained 1.5% to end the day at $80.52.
"To give you some perspective, it was around $40 a barrel a year ago, and oil is the biggest factor when it comes to the price you pay at the pump," said AAA spokesperson Amy Parmenter. "This is where we are today and kind of for the foreseeable future, but the expectation is that gas prices could inch up even further."
Gas prices plummeted a year ago when COVID-19 travel restrictions limited both the number of cars and trucks on the road and how far people traveled. But the number of miles driven on U.S. roads has returned to pre-pandemic levels, and the Organization of Petroleum Exporting Countries forecasted last month that the world's thirst for oil will exceed pre-pandemic levels next year despite ongoing efforts by industrialized countries to switch to electric vehicles and limit the burning of fossil fuels. Last month, OPEC raised its forecast for global oil demand for 2022 to 100.8 million barrels a day, higher than 2019's demand level of 100.3 million barrels.
Higher gas prices are boosting the price of shipments since trucking companies such as the Chattanooga-based U.S. Xpress Enterprises and Covenant Logistics pass along gas price increases to their customers with weekly fuel cost adjustments.
Republicans in Congress argue that rising gas prices, combined with increasing costs for housing, food and other commodities, could spiral even higher if Congress adopts a proposed $3.5 trillion infrastructure plan that will pump more money into the economy and encourage limits on some U.S. fossil fuel production and use. U.S. Sen. Bill Hagerty, R-Tenn., likened President Joe Biden's approach to that of former President Jimmy Carter in the 1970s when gas prices nearly doubled.
"Biden and the Democrats still want to spend trillions of dollars more, even under these economic conditions - it's Jimmy Carter 2.0. It has to end," Hagerty said in a statement last month.
Despite recent increases in gas prices, the pain at the pump for motorists refueling their vehicles was much greater a decade ago, even without considering inflation and the improved mileage of today's cars. At this time of the year in 2012 when Democrat Barack Obama was president, Chattanooga motorists were paying $3.53 a gallon for gas and in October 2011 Chattanooga gas prices averaged $3.21 a gallon for regular fuel.
Nationwide, the average price of gas topped $4 a gallon at its peak in July 2008 when Republican George W. Bush was in the White House.
"I think it's kind of a bipartisan thing," said Ben Michaels, a motorist who filled up his car at a Chattanooga Speedway station Monday. "Nobody wants to pay more for gas."
Michael Strok, a Highland Park resident who said he uses his Ford F150 pickup "sparingly" to limit the $80 cost of filling it up, remembers paying less than a dollar a gallon for gas when he was a kid.
"I've noticed that prices are higher, but it hasn't changed any of my travel plans," he said. "I guess we have to just take it as it goes."
Chris Luberecki likes the fact that gas prices are still lower than the U.S average in Chattanooga.
"I have friends in other states who are seeing gas prices at $5 a gallon, so it could be a whole lot worse," he said.
In the Chattanooga region, gas prices Monday were cheapest in Dunlap, Tennessee, where a price war of sorts kept the average price of regular gas at $2.65 a gallon at four local stations - the Hi-Tech, Spirit, B Quick Market and CITGO stations in Sequatchie County, according to GasBuddy.com.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.
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