May 09 - Here we go again. Gas prices have started to creep back up again this week. The current average price in Virginia for regular gas is $4.10 down from the March peak of $4.49 but up 12 cents in a week… and rising.
No other jurisdiction in Virginia is more impacted than the state's most populous county - Fairfax County. Where observers noted regular gas prices soared to $4.69 at some stations.
There are many causes for this increase. Some were predictable market fluctuations (e.g. the first summer driving season in 2 years is gearing up) and some were less predictable (e.g increased demand from consumers that had to return to the office for the first time since the pandemic started and sanctions against Russian oil due to its war against Ukraine).
In the wake of these issues, oil producers so far seem unwilling, or unable, to pump out enough supply to meet rising demand. Hence, rising gas prices.
The Organization of the Petroleum Exporting Countries Plus, an association of oil-producing countries that includes Russia, has actually actively worked to keep prices — and therefore profits — high by limiting supply. This reality led the Biden administration to allow oil and gas development on federal lands. Unfortunately, the downward effect this announcement had on prices was fleeting. Gas prices momentarily fell in late March and April but are now creeping back up.
This may affect the upcoming fall election cycle. Gas prices are very visible and impact most consumers. As a result, officials are rushing to console irritated constituents angry over the higher cost of living in any way they can.
In Virginia, legislators are proposing direct cash relief for auto owners after a Virginia Senate committee voted down Republican Governor Youngkin's proposal to suspend Virginia's state gas tax of 26 cents a gallon for 3 months. Democrats, environmental advocates and construction businesses argued that the “actual benefits to average Virginia drivers would be minimal, while the long-term costs of lost transportation dollars would be steep”.
Though another version of Youngkin's bill is still circulating in the House of Delegates, it is competing against another proposal by Delegate Watts (D-Fairfax). Delegate Watt's plan, if approved, would grant Virginia households $50 per car or up to $100 per household.
In addition, county level officials are also trying to ease the financial burden of higher gas costs. The Fairfax Board of Supervisors just approved a measure to allow taxi drivers to add a $1 surcharge for every trip from May 4 to June 11. This $1 will go directly to taxi drivers and does not apply to Lyft or Uber operators.
It is yet to be seen if future ordinances and proposals will be approved by either County or State Officials, but one thing we do know is that we will all pay more to fill up our tanks for the foreseeable future.