NJ gas prices are trending down but experts are worried
Over the past two weeks in New Jersey, prices at the pump have dropped about 15 cents a gallon but the cost of filling up your tank remains at near-record highs.
Garden State drivers are wondering what happens next.
Tom Kloza, the global head of energy analysis for the Oil Price Information Service, said the wholesale price of gas has been dipping, which should continue for the rest of June.
"But I’m still worried about July and August," he said. "I still think we could see really, really high prices there."
What about the president’s plan to suspend the federal gas tax?
Rutgers economist James Hughes said even if President Joe Biden is able to convince Congress to freeze the 18.4 cent a gallon federal gas tax for the next few months and Gov. Phil Murphy agrees to suspend the state gas tax (an idea he has rejected so far) “that would be a 10% reduction in price. I don’t think that’s a game-changer by any means.”
He said even in the best-case scenario, “it’s not going to be a major impact on people’s lives. I don’t think anybody is going to be happy.”
Kloza said a major reason why the price of gas has been going down is because demand has dropped, especially among lower wage earners.
“If they buy 90 gallons a month it’s $450. It’s kind of like a luxury car payment,” he said.
A welcome break
Kloza said what’s happening right now is a "welcome respite" but July will bring "an awful lot of pent-up demand from people who didn’t take vacations."
Kloza said no one has a crystal ball for gas prices but “for the rest of June they should drop. July is anybody’s guess because of the demand surge. And August it’s all about hurricanes.”
He noted if a strong storm disrupts refinery production in and around the Gulf of Mexico gas prices could surge even higher.
Hughes said while political leaders always want to look like they’re taking action to address high gas prices, the cost of gasoline now is really determined by global markets.
Kloza stressed while the immediate gas price trend is positive “we’re not going back to where you can fill up for $25, but at least you might be able to drive for a week without basically emptying out your wallet.”