Larry Southard has been updating customers almost every day on social media on the cost of gas at his station in Berkshire County — a jump he says has been “unprecedented” during 21 years of business.
“The first jump was 30 cents a gallon. The next jump was 30 cents a gallon the next day,’’ Southard told GBH News on Wednesday. “It really shot up very quickly.”
Since Israel and the U.S. first attacked Iran on Feb. 28, gas prices have risen about 60 cents nationally, according to AAA Northeast. In Massachusetts, the price of regular unleaded gas has risen about 50 cents, climbing to $3.44 as of Wednesday compared to $2.90 a month ago.
The sudden jump has put a strain on both consumers and local gas station owners as they try to keep prices competitive while remaining profitable.
Alex Weatherall, owner and operator of Sherborn Fuel, an independent gas station and convenience store in Sherborn, said that on Tuesday, he paid $6,000 more for a load of gas than he did just days days earlier.
He said he been reluctant to increase his gas prices to “where they should go” because he wants to remain competitive. But that means less profit and more stress when it comes to keeping his business of 15 years afloat.
“When gas prices go up, gas stations suffer,” he said.
Mark Schieldrop, senior spokesperson for AAA Northeast, called the “dramatic” rise in prices in a short period of time “relatively unusual.”
“Since the invasion, we’ve seen a really rapid escalation in prices every day of the week,” he said.
In general, gas prices tend to “skyrocket” in the short term in response to geopolitical conflict, Schieldrop said. They then plateau and “start drifting down like a feather” as prices stabilize and crude oil becomes cheaper.
Gas prices are closely tied to the price of crude oil. When gas prices peaked in 2022, crude oil was trading at about $100 to $120 per barrel — in line with the $100 per barrel it was going for on Sunday night after the outbreak of the war in Iran.
“Oil prices are flirting with those numbers, so that could have an impact,” Schieldrop said.
In recent days, Schieldrop said, crude oil prices have dropped to about $80-90 per barrel. The current outlook is better than in 2022, he said, because gasoline supplies at the time were still bouncing back from COVID-19.
Still, the Middle East is producing about 5 million fewer oil barrels a day with the current conflict, Schieldrop said. Such a drastic drop in production will not be quick or easy to turn around.
“It’s not like they can just flip a switch and bring the production back overnight,’’ he said. “Closing down a refinery or dialing back oil field production — it’s kind of like turning around a giant cruise ship.”
In addition to reduced production, the conflict has slowed traffic through the Strait of Hormuz — the world’s busiest oil-shipping channel near Iran — delaying deliveries to global markets.
Southard, owner and founder of Papa’s Healthy Food & Fuel in Otis, said market volatility also makes it hard to be competitive with other gas stations. On Monday, he bought a load of fuel after price increases over the weekend. Now, the price has gone down.
“I’m sitting on a load of gas and diesel that I bought Monday … I’ve paid 24 cents per gallon more for it than what you could buy it for today,” Southard said. “So your price is higher now than someone who is selling enough gas where they get a load every day and they can take advantage of that drop.”
While regular unleaded prices are rising, diesel prices are seeing even more of a jump, threatening to impact the cost of consumer goods transported on tractor trailers, Schieldrop said.
A month ago, diesel prices in Massachusetts sat at $3.94 per gallon, according to AAA Northeast. As of Wednesday, they’re averaging $4.83 — a 23% hike.
“Much of the economy really hinges on diesel prices, agriculture, fertilizer, transportation, shipping, so you name it,” Schieldrop said. “Looking at diesel prices should raise some alarm bells.”
The MBTA, which relies on diesel for much of its bus fleet and commuter rail operations, mitigates impacts of market instability by purchasing fuel ahead of time. A spokesperson for the MBTA said the agency purchases 50% of fuel ahead of time, locking in the price in advance despite market variabilities. The second half is bought at the market price.
Schieldrop said it’s too early to tell whether the increased prices have changed consumer habits. When gas prices jumped in the past, he said, people tend to decrease spending in other areas and take fewer and shorter trips. It’s impossible to tell when gas prices might level off, he added.
“Until this conflict is fully resolved, we really aren’t sure, and prices can continue to worsen as the days go on,” he said.
