Gas prices in Ohio soar, jump up 60 cents at some stations
For the first time in a couple months, the price of a gallon of gas at many Ohio stations jumped to over $3 a gallon.
The reasons for the sudden price hike − in some instances by as much as 60 cents a gallon − are many and a bit complicated. Ohio is among what some analysts call a roller coaster state where the price can fluctuate dramatically. And this latest so-called price cycle was exacerbated by several other factors.
Why did gas prices jump in Ohio?
Patrick De Haan, head of petroleum analysis at Gasbuddy, said some states − particularly Ohio, Michigan and Indiana − are more prone to so-called pricing cycles.
“Gas prices in Ohio defy logic,” he said.
The major chain stations in the state will suddenly hike prices dramatically every two weeks or so to better reflect the industry standard of a 50-cent profit margin for a gallon of gas.
And then, he said, a couple of days of competition will slowly force them to lower prices by a few cents at a time over a two-week span before dramatically hiking them once again to restore to the 50-cent margin.
What made this latest jump seem so dramatic and unusual, De Haan said, was that this pricing cycle came amidst uncertainty of prices globally as conflicts rise in the Middle East. A cold snap also impacted refineries in Texas and other states.
This comes with the backdrop of rising labor costs for station owners, as Ohio’s minimum wage jumped to $10.45 an hour as of Jan. 1.
All these factors collided to create a real sticker shock for drivers this week, with many prices for a gallon of regular gas coming in around $3.19 or so at many stations.
This puts Ohio at or slightly above the national average, according to Gasbuddy, which tracks prices across the country thanks to hourly reports from millions of drivers.
When will gas prices lower in Ohio?
In the short term, De Haan said, gas prices should start to inch lower, as we are in the beginning of the
price cycle.
“I think in a couple of weeks, we might see gas in Ohio back in the $2 range,” he said. “But we will likely be back above $3 a gallon through the fall.”
The spring and summer driving season historically brings higher prices at the pump.
While these sometimes dramatic price swings in Ohio can seem painful at the pump, De Haan said, studies show the usual decline that follows, on average, benefits motorists in the long run as the profit margin at stations shrinks.
“We are at the front of the cycle,” he said. “We tell motorists if they don’t have to fill their tank right now − wait.”