FARMINGTON – The surge in gasoline prices that motorists in New Mexico and the United States have experienced this year was not unexpected, with market analysts predicting late last year that such an increase was likely as the effects of the COVID-19 pandemic began to wear off and normal activity resumed.
But the end of those price hikes may finally be in sight, with fuel demand expected to peak this month before starting to decline in September, according to a spokesperson for AAA Texas / New Mexico.
Daniel Armbruster, a public affairs specialist for the organization, said the summer driving season has been robust across the country, with many families taking advantage of relaxed COVID-19 restrictions to hit the road. Many people who avoided their normal commute by working from home in the last few months of last year also returned to the office in 2021, he said.
These factors led to a much higher demand for gasoline, resulting in much higher prices at the pump than motorists were paying in early December 2020, when demand was severely dampened by the pandemic.
“It’s a combination of the two,” Armbruster said of the steady rise in gas prices over the past eight months.
The average price of gas in New Mexico
According to the weekly AAA Weekend Gas Watch published on August 5, the statewide average price of gasoline in New Mexico is $ 3.10 for a gallon of regular unleaded fuel. This was an increase of 1 cent from the previous week and an increase of $ 1.07 from the same date in 2020. The national average is $ 3.19.
The AAA survey indicates that these numbers correspond to increased demand. Figures compiled by the U.S. Energy Information Administration for the week ending July 30 show demand increased 5% from the previous week, which Armbruster described as a healthy jump but not without previous.
“If demand stays as it is, we will continue to see gradual increases at least for a few more weeks,” he said. “But that’s the top of it now.”
Armbruster said vacation bookings made through AAA rose 15% in June compared to June 2019, which was a record year for travel. But with the traditional holiday season coming to an end, demand could start to decline, which could end the long period of increase, he said.
Historically, prices start to drop in September or October of each year, he said, explaining that the drop in demand, as well as the production of winter blend gasoline, which is cheaper to produce, contribute to this dynamic.
“We expect that to happen (this year),” he said. “There is nothing that says it won’t happen.”
What are the prices of Farmington gas?
Prices have been rising for almost eight months. On December 14, motorists in Farmington were paying on average less than $ 2.04, but the average price for the town in the August 5 survey was $ 3.29, an increase of $ 1.25 per gallon or 62%. The record average price for Farmington, according to the survey, is $ 4.15, a mark established on July 15, 2008.
The average price in Farmington remains the highest among the state’s four metropolitan statistical areas, as it did for most of 2021. Albuquerque drivers paid the least at $ 3.06, while Santa Feans paid $ 3. $ 13 and motorists in Las Cruces were paying $ 3.19.
Armbruster acknowledged that it was a bit unusual for Farmington to consistently post the highest gas prices in the state. But he noted that this kind of dynamic is also happening in other parts of the region. For example, he said, the price of gas in El Paso is consistently higher than in the rest of Texas.
He also said that while prices may seem unusually high now, they’re not really out of step with what consumers have seen in recent years. There were times in 2018 and 2019, he said, that the average price of gas in New Mexico hit the neighborhood of $ 2.75 or $ 2.80 – not far from the average of 3. , $ 10 that the state saw this week.
“There isn’t a big gap there,” he said.
Mike Easterling can be reached at 505-564-4610 or [email protected] Support local journalism with a digital subscription.