Larissa Montminy had one word for the price of the gas she was putting into her new Honda Civic Monday at Portland’s Forest Avenue Sunoco station.

“Awful,” said the 20-year-old, who works at two jobs as a community assistant and waitress.

Montminy paid about $37 for about 10 gallons of gas on Monday. She said that she usually looks for the lowest priced gas, and while her 2013 Civic gets good mileage, she has noticed that her regular 108-mile trip from Bangor to Auburn to visit family is noticeably more expensive.

Her trip is likely to become even more expensive, with summer motorists in Maine and political unrest in Egypt the biggest factors pushing the state’s gasoline prices higher than the national average in recent days, petroleum industry analysts said.

Maine’s average gas price was $3.71 per gallon Monday, about 7 cents higher than the national average of $3.64 per gallon, according to Minnesota-based gas price analysis firm GasBuddy.com.

A month ago, Maine’s average price per gallon was lower than the national average, at $3.58, according to GasBuddy.com, while the national average price remained virtually unchanged at just under $3.64.

One of the biggest contributors to gas price fluctuations is the price of crude oil. The average price for a barrel of crude has increased by about 8 percent during the past month from $98 to $106, according to GasBuddy.com.

Reasons for the price spike in Maine are numerous, but they boil down to two basic categories: increased demand, and the perception that supply could decrease in the near future, said Charles Colgan, professor of public policy and management at University of Southern Maine’s Edmund S. Muskie School of Public Service.

In Maine, as in other states in the region, consumer demand for gasoline increases in the summer as more motorists take to the roads for local and cross-country trips, he said.

As that demand approaches the maximum amount of supply that regional refineries can produce, it drives up prices at the pump, Colgan said.

“We’re at the peak limit for refining capacity right now,” he said.

Demand for gasoline in Maine is likely to remain at that peak limit for the next six weeks until tourist activity begins to taper off, Colgan said.

On the supply side, motorists in Maine are paying for Egypt’s political instability in the form of what Colgan calls a risk premium.

Unlike states in the Southeast that get a large portion of their gasoline from crude oil drilled in the Gulf of Mexico, the bulk of Maine’s petroleum comes from the Middle East and Canada, he said.

At the moment, investors are betting on a possible disruption in the supply of oil from the Middle East because much of that supply — some 3 million barrels a day — passes through Egypt’s Suez Canal on its way to the U.S. and Europe, Colgan said.

The recent overthrow of Egyptian President Mohamed Morsi and uncertainty about the type of government that ultimately will take power in that country have led crude-oil investors to drive up the price of oil futures on speculation that the supply of oil passing through Egypt will be disrupted, petroleum analysts have said.

“The oil coming through the Suez Canal is an issue for Maine and the Northeast, because we do get oil from the Suez Canal,” Colgan said.

Analyst predictions that gas prices could increase another 25 to 30 cents in the coming month aren’t unrealistic, he said, even though it’s unlikely Egypt would actually shut down the Suez Canal, since its revenue represents about half of the country’s gross domestic product.

“When people have concluded that the risk was overblown … prices will decrease again,” he said.

Aaron Truman put $10 in his mom’s van at a station on Broadway in South Portland Monday, paying $3.80 a gallon. That $10-dollar bill probably didn’t even fill one-fifth the size of the tank, he said.

Truman, 18, drives a Dodge Durango that gets 14 miles to the gallon. If prices go up any more, he said he would cut down on driving.

“I won’t be driving anywhere, except going to work. It’s just too expensive,” he said. “I mean just going to the mall and back is going to cost $10.”

In Westbrook, Brenda Broder said that higher gas prices means she tends to ride her motorcycle rather than drive her car, weather permitting.

“With my motorcycle, I’m not as concerned about it,” the self-employed hair stylist said while straddling her Suzuki Savage motorcycle. “I get about 120 miles out of 2 and a half gallons.”

Joe Curran, a cab driver at 207 Taxi, said higher prices take a bigger cut out of his bottom line, because drivers have to pay for their own gas.

Cab drivers can only raise their fares by petitioning the city, Curran said. And in his eight years of driving, that’s only happened once. So the only thing to do is watch a bigger chunk of profits go to gas, offset a bit by the busier summer tourist season.

“It’s just a necessary evil,” said Craig Cobbett, 207 Taxi’s mechanic. “You can’t really combat the prices.”

Cobbett does try to reduce costs for the drivers, though. He says regular maintenance like keeping the right amount of pressure in the tires and getting the oil changed can get some extra miles out of each gallon.

The taxis get about 16 miles to the gallon and a cab driver usually pays upwards of $40 of gas per 12-hour shift, Curran said. That means about $800 a month in gas expenses alone. If that goes up, the cab drivers will just be out more.

“There’s really not much you can do about it,” Curran said. “You just make less money.”

There are a number of other factors that affect gas prices in Maine and the rest of the country, according to Colgan and Gregg Laskoski, a senior petroleum analyst for GasBuddy.com based in Tampa, Fla.

Weather can have a huge impact on price fluctuations, especially in areas prone to hurricanes and other natural disasters, Laskoski said.

The threat of a hurricane can force offshore oil rigs to shut down and evacuate for up to a week, he said, which disrupts the supply of domestic oil.

Damage to coastal oil refineries from hurricanes such as Katrina and Sandy has an even longer-lasting effect, he said, because it can take weeks to get those operations back to full capacity.

In Maine, the effects of weather on gas prices tend to be less dramatic but still very real, the analysts said.

For instance, a prolonged summer heat wave tends to drive up prices because people are more likely to travel by motor vehicle, Laskoski said.

Gas prices also can spike when winter weather comes later than usual or is milder than expected, Colgan said.

Refineries in Quebec and Ontario, which provide both petroleum and heating oil to Maine, decrease production of gasoline each winter and ramp up heating-oil production.

Mainers drive a lot less during cold weather and instead consume more heating oil, he said, but if temperatures remain mild it can result in a gasoline shortage.

“If they time it wrong, you can get a negative effect on prices,” Colgan said about the transition from petroleum to heating-oil production.

Taxes and government regulation also affect gas prices, although they do so in predictable ways, Laskoski said.

For instance, Maine residents pay about 50 cents per gallon in state and federal taxes when they buy gas, he said, about 10 cents higher than the national average.

Because of federal mandates on the use of cleaner-burning fuel additives from May 1 to Sept. 30, consumers across the U.S. tend to pay more for gasoline in the summer than they do in the winter, Laskoski said.

“That’s why we usually see the lowest price of the year in the fourth quarter,” he said.

Investor activity also plays a major role in the price of gasoline.

Investors buy crude-oil futures for a variety of reasons, Laskoski said, including the belief that oil prices will increase, or as a hedge against other potential losses such as a weakening of the U.S. dollar.

Therefore, when the dollar’s global value declines, gas prices tend to go up, Laskoski said, even though it has nothing to with the balance of supply and demand.

One of the only sure-fire ways to reduce the price of gasoline is to descend into a deep economic recession, he said.

“Everybody wants low gas prices, but you’ve got to be careful what you ask for,” Laskoski said.

Portland Press Herald staff writer Karen Antonacci contributed to this report.

 

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