East Coast pipeline hack not to blame for N.M.'s rising gas prices, AAA says
Fuel costs likely to continue to go up through Memorial Day
- New Mexico motorists were paying an average of $2.93 for a gallon of regular unleaded on May 13.
- Farmington drivers were paying the highest prices of the state's four metropolitan statistical areas at an average of $3.15 per gallon.
- That was an increase of 8 cents per gallon over the average last week.
FARMINGTON — As they have since early December, gasoline prices continued to rise in Farmington and across New Mexico last week, but industry analysts say the recent hacking of an East Coast fuel pipeline is not to blame.
According to the weekly AAA New Mexico Weekend Gas Watch report issued May 13, motorists in the state were paying an average of $2.93 for a gallon of regular unleaded fuel on that date. That represented an increase of 3 cents from the previous week and a jump of $1.16 per gallon over the price on the same date in 2020.
As is frequently the case, Farmington drivers were paying the highest prices of the state's four metropolitan statistical areas at an average of $3.15 per gallon. That was an increase of 8 cents per gallon over the average last week.
What is the Colonial Pipeline?
The theft of data from the company that owns and operates the Colonial Pipeline — which stretches from Texas to New Jersey, supplying much of the gas sold on the East Coast — by extortionists resulted in the shutdown of the pipeline for several days. Gas prices have climbed sharply in that region with many reports of panic buying by drivers.
But Daniel Armbruster of AAA Texas/New Mexico said that disruption appears not to have affected gas prices or gas supply outside that region.
"At this point, we don't believe it's due to the pipeline," he said.
Instead, he said, the continued increase in the price of gas in New Mexico reflects the increase in demand that industry analysts have predicted or witnessed since early December.
"Oil prices have been ticking up, as well as prices for gas going up before the pipeline (shutdown)," he said.
'No reason to panic'
Armbruster emphasized that despite media reports of long lines of motorists waiting to fuel up at some locations on the East Coast, there is an ample supply of gasoline in the U.S.
"There's certainly no reason to panic," he said.
Farmington drivers were paying an average of only $2.04 for gas on Dec. 14, 2020. But prices began to climb immediately afterward, spurred by a number of factors, and have flattened only a few times in the months since then.
Armbruster said the easing of pandemic restrictions and ensuing economic growth in many parts of the country have led to an increase in demand for gasoline. That situation is expected to snowball as summer approaches and many families hit the road for a long-delayed vacation.
AAA New Mexico is forecasting a 60% increase in travelers in New Mexico this summer compared to the same time a year ago, he said.
That means gas prices are likely to continue to rise through Memorial Day, Armbruster said.
Other factors contribute to NM gas prices
Other factors also have contributed to the increase in fuel costs, he said. The Arctic blast that hit Texas and Louisiana in February resulted in the shutdown of many refineries and limited supply. Armbruster also cited a recent trucking shortage that has impacted the ability of gas wholesalers to get fuel to gas stations.
As for when gas prices might level out, Armbruster said the picture is less clear.
"That will depend on demand and the supply train issues working themselves out," he said. "We could see issues pop up between those (factors) throughout the summer."
In the meantime, Armbruster acknowledged the pain drivers are feeling these days.
"The prices is definitely something people will notice when they're filling up," he said.
That is particularly true for Farmington drivers, who are paying well in excess of the national average of $3.03 per gallon. Motorists in Las Cruces were paying the cheapest gas prices in the state on May 13 at an average of $2.83.
But some relief from rising prices could be on the way. The AAA weekly report cited figures from the U.S. Energy Administration showing that U.S. gas demand for the week ending May 7 was practically the same as it was the week before at 8.8 million barrels a day. It reported that regional fuel supplies were steady, and Gulf Coast refinery utilization was 88 percent, only 2 percent less than the previous week.
Mike Easterling can be reached at 505-564-4610 or email@example.com. Support local journalism with a digital subscription.