Average gasoline prices in Florida went up 10 cents a gallon during the past week, and an anticipated spring increase could be exacerbated by a surprise move by OPEC — the Organization of Petroleum Exporting Countries — to cut production.
OPEC consists of 13 member countries, including Iran, Iraq, Saudi Arabia, Venezuela and the United Arab Emirates, according to its website. The U.S. Library of Congress states that OPEC is often referred to as a cartel, as the organization controls oil output to influence market prices.
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The AAA auto club said the average price of a gallon of regular unleaded Monday was $3.47 in Florida, 4 cents lower than the national average, with the highest prices in South Florida and the lowest in the Panhandle.
The past week’s uptick had been expected because of rising demand during the spring travel season and tighter supply.
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But that was before OPEC announced plans to cut production by up to 500,000 barrels a day starting in May.
“The cuts are reportedly an effort to prop up oil prices, which recently plummeted to 15-month lows due to fuel demand concerns created by the banking crisis,” AAA said in a news release.
After the announcement, prices rose above $80 a barrel for the first time since early March, AAA said.
“That price hike alone is equivalent to a 13-cent jump at the pump,” AAA said.
Patrick De Haan, head of petroleum analysis with the fuel-savings app GasBuddy, projected OPEC’s move will cause oil prices to rise $3 to $6 a barrel, which he estimated for motorists could translate to between 5 cents and 15 cents more a gallon.
“Various OPEC members throwing together a production cut that could have an impact on summer gas prices, but economic concerns may persist, so to me, this isn’t a huge game changer,” De Haan wrote.
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