One of the silver linings during the pandemic for 31-year-old Kingsbridge resident Alex Johnson was how little he was paying to fill up his beloved 2018 Dodge Durango called “Dudley” on his daily early morning work commute to New Canaan, Connecticut.
“Dudley’s a gas guzzler, so normally $90 to $120 a month for two hours back-and-forth,” said Johnson, who is a regular patron at the Mobil station at 5832 Broadway in the Bronx. “During the pandemic, I was paying so much less because no one was on the road.”
As fewer cars were on the road and remote work meant most commutes were made from room to room, gas prices plummeted to under $1 a gallon in at least 13 states as demand fell during the first few months of the pandemic. For Johnson, who is an essential employee, he reveled in the fact that he was paying only $40 bucks, at most, to fill up Dudley for his daily trek to Connecticut.
But now, Johnson, through heavy sighs and expletive mutters, is back to paying as much $5 a gallon at the pump, as gas prices nationwide are at the highest levels since 2014, according to AAA and GasBuddy. According to AAA, regular gasoline prices in the Bronx are around the state’s average of $4.28 a gallon.
But in some areas like a Mobil gas station in the Soundview section regular prices are as “low” as $4.39 a gallon and as high as more than $5.
That number has gone up more than 40% over the past calendar year to $4.29 per gallon as of Monday, and AAA said New York City’s all-time high of $4.41 a gallon, set in the summer of 2008, could be surpassed later this week.
Krystal Shephard, a Hunts Points resident who said gas pumps in her area have steadily been in the “mid-to-high 4” dollar range, wants to know who to blame for the surge. AAA officials point to both the growing cost of crude oil and a recent decision from the Organization of the Petroleum Exporting Countries (OPEC) to increase oil output by 400,000 barrels a day for its 13 member countries have been falling short of production quotas.
“In short, we’re here because of COVID and Russia,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
De Haan explained that the pandemic’s effect on the oil industry was crippling. The demand for gasoline plummeted amid a shift to more work from home settings, which then led to oil companies flattening production and laying off employees in bulk.
Oil companies, and by extension gas prices, have bounced back due to the U.S. increasing vaccination rates and the gradual reopening of the country. De Haan said that around last summer, gas prices shot back up at a “furious pace” as confidence in vaccines and office re-openings began to take shape.
However, a major issue has transpired for oil suppliers in the wake of surging gas prices and production. Now, they may not be able to meet the rise in demand.
“Those long-term decisions that oil companies were forced to make (layoffs, production) meant that they were in a predicament as demand started rebounding much faster than they can keep up with,” De Haan said. “So, when OPEC started to increase production last July, three months after demand came back up, oil production has been behind the entire time and it can’t catch up.”
The 23-country OPEC+ alliance, which controls half of the global crude supply, has been hiking its production quotas every month, but the difference between those targets and its actual output is stark, with demand outpacing production.
The month of January saw a 600,000 barrels per day quota shortfall, according to the latest S&P Global Platts OPEC+ survey, which experts believe is indicative of a looming supply crunch. In February, OPEC oil output rose by 420,000 barrels per day.
DeHaan said that this situation is only exacerbated by growing geopolitical tensions between the U.S. and major crude oil exporter Russia, with President Joe Biden levying financial sanctions on the eastern European power’s for its invasion of Ukraine.
Ukraine is a major transit hub for oil and gas, combined with the sanctions imposed on Russia possibly reducing the available oil supply in a tight market, experts believe it’s a storyline to watch when it comes to future gas price trends.
“Oil demand is returning to pre-Covid levels, and it is likely to rise throughout this decade,” said longtime U.S. Diplomat David Rundel. “Russia and Saudi Arabia are the world’s two largest oil exporters. The energy axis that has emerged between Beijing, Moscow and Riyadh is based on solid economic interests and has begun to develop a political component.”
As of late 2021, the U.S. was importing 8.5 million barrels per day of crude oil from other countries, and keeping up with that demand — with the threat of more sanctions and geopolitical drama — might create even more for the world’s top oil producers.
“This is the time to go outside and travel for most people, given how long they were at home for, and Americans are spending more during the highest rate of inflation,” said De Haan. “People are still spending money on fuel and that demand isn’t going away. But the major wild cards are oil production and how it catches up to OPEC and rising political tensions.”
For those at the pump like JoDell Green, a North Riverdale resident who drives 50 minute to work every week, finding the cheapest gas prices in her neighborhood is a proving to be an everyday challenge.
“You drive by one (gas station) and you see it’s risen to $4.50, and then the next week it’s $4.70, and did I miss a memo or meeting where we were clamoring to pay this much for gas?” she said.
Some Bronxites are finding some prime spots for affordable refills such a BP in the Allerton section that many are hailing as the cheapest in the borough with prices in the low-to-mid $3 range per gallon.
Others like Sean Russell, a community college student who pumps air for his bike at a Shell in the Parkchester section, has a simpler advice: find a new mode of transportation.
“We’re in New York City and if you work in the city, why are you driving anyway? We have a public transit system and bike lanes, there’s no excuse to pay ridiculous amounts of money at a gas station,” he said. “We know that the entire oil industry is doing irreversible harm, so make them more money if you want to … I just stick to my bike and save my money.”
Click here to read our first inflation article on the rising costs of supermarket groceries.
Reach Robbie Sequeira at rsequeira@schnepsmedia.com or (718) 260-4599. For more coverage, follow us on Twitter, Facebook and Instagram @bronxtimes.
