ANCHORAGE, Alaska (KTUU) – Average gas prices in the state of Alaska reached $5.06 Tuesday, nearly twenty cents higher than last month and seventy cents above the national average, according to AAA.
Diesel prices are soaring at an even higher rate, with Tuesday’s mark of $6.40 sitting nearly a full dollar above last month’s price.
Fueled by increasing unrest in the Middle East, including a wave of attacks by Houthi rebels in Saudi Arabia Monday that damaged infrastructure, crude oil prices worldwide sat at $104.59 per gallon on Tuesday — hurting the wallets of drivers on the other side of the world.
“It’s putting a strain on my family and all of our expenses,” one driver said.
“I just don’t drive anywhere unless I have to,” another said.
The strain can be even more severe for business owners, like construction company owner Jeremy Coke.
“If you’re quoting material and trying to get the cost of goods shipped to Alaska, it might be eight weeks out before those goods hit the dock in Seattle, and your fuel surcharge has gone up X percentage,” Coke explained. “It’s really hard to dial that in. It’s just a moving target.”
While rising fuel costs have negative short-term effects on Alaskans, the price of crude oil being as high as it is can also have a paradoxically positive long-term impact on Alaska’s finances, according to University of Alaska Anchorage economics professor Dr. Ian Hartman.
“Two things can be true at once,” Hartman, who heads UAA’s Institute of Social and Economic Research, explained. “On the one hand, consumers, and Alaskans, are going to be paying more at the pump. We already are, and that’s not good for anybody’s pocketbook.
“On the other hand,” he continued, “it is true that Alaska’s state finances still in large part depend on oil revenues, and so with the rise in the price of oil and gas, that will have a positive impact on Alaska’s bottom line.”
Hartman mentioned that such a boost could help Alaska enhance its energy infrastructure and eventually become less dependent on geopolitics for its citizens to fill up their cars.
However, he stressed that changes like that would take time.
“Even if we were to get a shovel in the ground tomorrow,” Hartman said, “which obviously we’re not going to, but even if we did, that wouldn’t solve the immediate crunch that we’re all encountering.”
Hartman predicted that crunch will be a tight one as winter sets in, especially in Alaska’s more rural communities where fuel prices often wildly exceed the marks in Anchorage and Fairbanks.
“It’s going to put a lot of stress on Alaskans,” he said. “If you look at diesel prices in particular, so much of rural Alaska has some level of dependency on diesel. […] And so unless there’s somehow peace reached between Russia and Ukraine and some of those sources of diesel are able to come back online, unless there’s more stability in the Strait of Hormuz and now even the Red Sea and the Persian Gulf more generally, it’s frankly really hard to envision a near-term future where the price of diesel and the price of oil come down considerably.”
See a spelling or grammar error? Report it to web@ktuu.com
You must be logged in to post a comment Login