SYRACUSE, N.Y. (WSYR-TV) – Despite the gas tax suspension by New York State and some Central New York counties, the pain at the pump continues and so does the confusion for drivers!
When the gas tax break first went into effect last Wednesday, June 1, many of us saw prices at the pump drop pretty quickly.
However, with gas prices on the national level skyrocketing by the minute, many of you have reached out to the NewsChannel 9 team worried local gas stations might be price gouging.
NewsChannel 9 took your questions straight to the experts: Wayne Bombardiere, Executive Director of the New York State Association of Service Stations and Repair Shops, and Patrick Penfield, an expert in supply chain management at Syracuse University.
Bombardiere says the hike in gas prices is a direct result of oil companies and distributors raising their prices for the gas stations.
“When they raise the price to the dealer, the dealer has no choice but to put that price on the pump. It can’t go anywhere else. Same way if the price comes down – that’s when you see the prices coming down.”
WAYNE BOMBARDIERE, EXECUTIVE DIRECTOR, NYS SERVICE STATIONS AND REPAIR SHOPS ASSOCIATION
So, it’s most likely not gouging. Gas stations are being forced to raise their prices in order to stay in business and make a profit, according to Bombardiere.
Patrick Penfield also says the rise in prices have to do with the competition in the market.
“If you own a gas station, you’re competing with other gas stations,” Penfield explained. “So, if they’re all raising the price and you raise the price, it kind of limits your availability of getting a lower price.”
Unfortunately, the prices aren’t expected to drop any time soon, even with the New York State gas tax suspension in place.
“I think for the rest of the summer, we’re going to start to see these prices still increase. Unfortunately, I’m sure your viewers don’t want to hear that, but I wouldn’t be shocked by the end of the summer if it weren’t at $6.00 per gallon.”
PATRICK PENFIELD, SUPPLY CHAIN EXPERT, SYRACUSE UNIVERSITY
Both Penfield and Bombardiere want to reassure drivers there are certainly benefits to the state’s gas tax cap, as we could very well already be paying more than $5.00 per gallon to fill up without it.
The only reason it doesn’t seem like it’s having any positive impact is because of the brutal, volatile rise in gas prices.
Right now, the profits haven’t changed. The owners are probably making less money now than they did at $3.00 a gallon. Why? Because you have to be somewhat conscious of your customer and the consumer. You’re trying to do your best to keep it low but not go out of business. There are guys that are probably making decisions, I know they are, I know them, is it really time to just get out now? Because it’s not going to get any better much sooner at all.
WAYNE BOMBARDIERE, EXECUTIVE DIRECTOR, NYS SERVICE STATIONS AND REPAIR SHOPS ASSOCIATION
Penfield believes within the next year to year-and-a-half, we will see a recession. His concern is if prices for fuel continue to rise, which could cause a recession to happen even faster.
Every 10% increase in fuel prices usually equates to a 0.3% increase in inflation. As gas prices go up, everything else is going to go up in price because you have to pick up materials, produce materials, you have to deliver materials and all that requires energy. So, unfortunately, that is what we’re seeing within the whole supply chain are these costs increasing so the consumer at the end of the supply chain is going to have to bear the costs of all the expenses that are increasing.
PATRICK PENFIELD, SUPPLY CHAIN EXPERT, SYRACUSE UNIVERSITY
As of Tuesday, the average cost for a gallon of gas in Syracuse is $4.82, according to AAA.
In New York State, the average price is inching closer to $5.00, averaging $4.94 per gallon.
