Gas Prices Jump Overnight Across Alaska
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Unleaded gasoline came in at $4.39 per gallon Thursday, March 3, 2022, at Speedway Express, 99 College Road, as gas prices rose across the state Wednesday and Thursday.
- Gary Black/News-Miner
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Unleaded gasoline came in at $4.39 per gallon Thursday, March 3, 2022, at Speedway Express, 99 College Road, as gas prices rose across the state Wednesday and Thursday.
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Filling up the tank will hit your wallet harder as gas prices jumped Wednesday and Thursday in Fairbanks and across the state.
Prices in Fairbanks ranged from around $3.82 per gallon at CostCo Thursday to $4.29 per gallon at the Holiday Station Store on Geist Road.
The average price Thursday for regular unleaded gas in Alaska was $4.036 per gallon, a 10-cent jump from Wednesday, according to the American Automobile Association (AAA). Diesel prices were similar at $4.037 per gallon.
The Fairbanks North Star Borough prices reflected the state average at $4.02 a gallon; Denali Borough towns, such as Healy, had lower averages at $3.90 per gallon.
Higher prices are spreading beyond the pump to include food, transportation and energy, according to economist Larry Persily, who is based in Anchorage and Juneau.
“Higher gas and diesel prices will affect every part of daily life,” Persily said. “Auto parts dealers, for example, who have to order parts will pay more and that increase has to go somewhere. Railroad, ships, barges and companies like FedEx all have fuel surcharges they reset regularly and will translate into delivery.”
Alaska state economist Neal Fried agrees.
“It will have impacts as it makes transportation more expensive on airline tickets. For areas like the Interior, it means higher heating costs,” Fried said.
Gas prices reflect market trends
Gas and diesel increases followed the rise of crude oil prices, which passed $110 a barrel Thursday.
The Russian invasion of Ukraine plays a significant part in the national increase. Russia is the world’s third-largest oil producer, behind the United States and Saudi Arabia, and largest exporter to global markets. Economic sanctions imposed by the United States and other nations have so far avoided Russia’s energy sector, but the White House hasn’t ruled them out.
“The world is short of oil, and the war in Ukraine is making it worse. As crude goes up, gas is going to go up,” Persily said.
Despite the Russian invasion, prices have been increasing even before the conflict.
“During the pandemic demand fell hard and gas prices fell,” Fried. “Then we got back to semi-normal last year and gas prices rose accordingly.”
Fried added that “supply wasn’t keeping up and the demand/price of oil continued to rise.”
Fried said the surge isn’t new to Alaska or the nation. Gas prices increased when the recession hit in 2008, as crude oil was more than $100 a barrel.
“We’ve seen this before, sort of, when prices go up but you don’t see prices fall that quickly,” Fried said. “The question is how much longer they will stay up.”
He said there’s no way to solidly predict oil and gas prices in the long term.
State benefits
Both Persily and Fried noted the increase in the cost of oil will benefit the state, which already projects a surplus from elevated prices from last year.
“It’s a double-edged sword because consumers like you and me are paying more,” Fried said. “The state treasury will be a lot better off now, and it will make its way into the economy.”
Fried added that increased oil demand and prices could stimulate activity on the North Slope, and with it, jobs.
Persily said the state could expect “tens of millions more” with the current trend but cautioned restraint for state leaders and the governor’s office.
“The question is how to spend it, save it and how long it will last,” Persily said. “High oil prices never last forever so you don’t want to go crazy and spend money you might not have next year.”
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