Georgia gas prices jump past $4 as Iran war continue to disrupt fuel markets
Georgia drivers are feeling the pain of an oil price spike, bringing the cost of a gallon of gas past the $4 threshold on Wednesday.
According to AAA, the average price for a gallon of regular unleaded gasoline in the Peach State is now nearly $4.05. That's a jump of almost 14 cents overnight, and over 33 cents compared to the same time in April.
Data shows that the average gallon of diesel fuel has also jumped by nearly 10 cents in a day, though a gallon remains 11 cents lower than a month ago.
While gas prices are higher than most Georgians are used to paying at the pump, they remain much lower than the national average, which was around $4.53 on Wednesday.
U.S. gas markets feeling pressure of Iran war
The main reason drivers are paying more at the pump is because of the global energy crisis caused by the Iran war. The price of crude oil, which is the main ingredient in gasoline, has been climbing for most of the past two months because the Strait of Hormuz, the narrow passage of the Persian Gulf through which a fifth of the world's crude oil normally passes, has effectively been shut, and oil tankers have been stranded there unable to deliver crude.
No one can predict how high gasoline prices will climb. A gallon of regular in the U.S. costs more now than it did in early May of 2022, and back then, the price kept climbing through Memorial Day, AAA said.
What refineries and traders are willing to pay for oil swings wildly after news breaks about attacks on ships in the Persian Gulf or diplomacy talks stalling.
Back in early March, at the beginning of the Iran war, the price of gasoline jumped 48 cents in a week. The highest weekly jump was in March 2022, when the price jumped 60 cents in a week after Russia invaded Ukraine, data from AAA shows.
Gas prices not going down anytime soon
Georgia's gas tax has been suspended since March, when Gov. Brian Kemp signed a bill temporarily putting the 33-cent-per-gallon tax on pause. It is unclear whether the governor will extend that suspension, which is set to end this month.
The longer the flow of oil is constrained through the Strait of Hormuz, the higher prices will go, and the longer it will take to get back to normal, said Rob Smith, director of global fuel retail at S&P Global Energy.
"Even if there was a true and lasting resolution of the conflict, both sides agree to play nice and truly do commit to keeping Hormuz open, it will still take months to get back to what it was pre-war, if not even longer," Smith said. "There will still be within the industry a risk premium associated with going through that region. Not that it was ever a perfectly safe journey, but the past few months have shown that it'll be hard to convince shippers and insurance companies that the risk level will be similar to what it was in February. It'll be a long time before anyone can be convinced of that."
Georiga drivers feeling the pain of rising prices
Rising gas prices are cutting into the bottom line for people who drive for a living in metro Atlanta.
"I mean, we got to pay a lot. ... $60 to $80 a day for gas for a Toyota. It is about an extra $30 to $40 a day," said Nassir Johnson, a ride share driver.
Johnson said the added cost is forcing him to adjust how and when he works.
"Wake up early. Drive as much before traffic. Miss traffic. Like right now is a good time to drive. Any time before 3. Any time after 8 pm," he said.
He said the more time spent sitting in traffic, the more fuel he burns, which further cuts into his daily profit.
The Associated Press contributed to this report.
