GAS PRICES SOAR ON LONG ISLAND

News: Gas Prices Soar on Long Island

(Long Island, N.Y.)The recent political unrest in Libya has caused a spike in U.S. gas imports. Prices are reaching over ninety-five dollars a barrel, and experts say that the biggest toll seems to be taken on Long Island residents. The situation has caused Long Islanders to fear an even sharper surge in prices, which may increase to five dollars a gallon by the summer.

Libya contains the largest reserve of all of the African nations that export oil. It belongs to the Organization of Petroleum Exporting Countries (OPEC) and exports over a million barrels of oil a day. It is the third largest oil-exporting nation in Africa, and the seventeenth most successful producer of crude oil in the world. However, it's the first member of OPEC to experience protests.

Experts have estimated that since oil has already increased five cents a gallon at the start of the protests, it will reach up to a hundred dollars a barrel in the near future. During the period of political upheaval, the rate of increase has been at least a penny per day. Heating oil has increased up to eight cents per gallon.

Prices at the pump are projected to reach four dollars per gallon, making drivers spend roughly $60 to fill an economy vehicle. Prices for crude oil have reached their highest in over two years. Analysts have noted that once Libya reduces its exports of oil in response to the political strife, there will be another round of drastic increases in prices.

A year ago, prices at the pumps were about three dollars and forty cents per gallon for regular unleaded, which is about sixty cents less than today's prices. Heating oil and diesel prices have increased about seventy-five and seventy cents per gallon respectively. As of December of last year, some prices on Long Island for regular gas were as high as three dollars and eight-nine cents per gallon.

Prices in Suffolk County have seen less of an increase than those in Nassau County; nonetheless, they are at the highest rate since 2009. One reason for the increase is that there has been a greater investment in oil in response to the recovery from a world recession. Since oil is priced in dollars, which are weaker than the Euro, it poses a more appealing investment for global investors while being a safer investment than stocks.

Another reason why there has been an increase in prices is that investors are dealing with a stronger global economy than that of two years ago. As of last December, the average price for a gallon of gas in the United States was about three dollars. The average price for Long Island was roughly three dollars and eighteen cents as of last May, at a time when the national average was below three dollars.

On Long Island, the last time prices were above four dollars a gallon was back in July of 2008. The last time that prices were above three dollars a gallon was immediately following that surge. By December of 2008, prices had dropped to under two dollars a gallon, and have been increasing ever since.

A decrease in prices is often caused by strong gasoline supplies and flat demand. However, something as basic as an improvement of weather conditions could cause an increase in prices. Fuels for warmer weather are more expensive to produce, and there is an increase in demand when conditions are more favorable for driving.

Jessica Cappelli

February 23, 2011 5:39 PM Eastern

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