Rochester gas prices highest in contiguous US
The Rochester area is benefiting from falling gas prices, but the average price per gallon here remains the highest of any metro area in the contiguous United States.
On Friday, AAA reported the average price for unleaded regular was $2.83 a gallon in the Rochester area, compared with $2.23 nationwide.
Only Anchorage, Alaska, ($2.91) and Honolulu ($3.45) have higher average prices among U.S. metro areas, according to the website, GasBuddy.com. Buffalo is less than a penny behind Rochester.
Actual prices at the pump in the Rochester region ranged Friday from a low of $2.67 a gallon in Ontario, Wayne County, to more than $3 a gallon in Gates.
While gas prices in Rochester and Buffalo are roughly the same, there is significant variation among other cities in the state.
The average price in Syracuse is $2.62. It's $2.64 in Binghamton, $2.72 in Albany and $2.80 in New York City.
Diana Dibble, a spokesperson for AAA, said local prices depend on a number of factors within each specific region, such as the number of wholesale suppliers and the level of retail competition.
In the Syracuse region, the opening of a Costco warehouse club in suburban Camillus helped drive gasoline prices down. The discount chain was selling regular gas at $2.76 in late October while others nearby were selling it for $2.90. Costco's low price pressured competitors to follow suit. On Friday, that Costco location was selling gas for $2.38 a gallon.
A Costco location in Rochester is currently under construction as part of the CityGate project, and is expected to open sometime in 2015.
Average prices in the Rochester area have fallen $1.02 a gallon since May 2, when they were at $3.85. But national prices have decreased by $1.45 a gallon over the same period.
Gregg Laskoski, senior petroleum analyst with GasBuddy, said he expected the highest gas prices would likely always be found in New York and California, due to a combination of high taxes and geographical disadvantages.
New Yorkers pay 68.65 cents per gallon in gasoline taxes, the highest in the country. The national average is 49.28 cents, according to the American Petroleum Institute.
But Laskoski said a bigger factor in the price at the pump is access to low cost crude oil, an advantage for residents in oil-producing states.
"Refineries in the Northeast are more reliant on high-cost Brent crude oil," Laskoski said, referring to a major supply from the North Sea.
Laskoski said transportation costs make it more expensive to bring crude oil from Texas to the Northeast than to import that oil from European suppliers.
Oil costs have been driven down by dramatic increases in U.S. production. "The benchmark crude is West Texas Intermediate. It peaked at about $110 a barrel in early summer. Today it's at about $53 and change."
Laskoski said that access to the lower priced crude was largely what accounted for lower prices in the Midwest and Great Lakes region.
Six states had average gasoline prices below the $2 mark on Friday: Missouri ($1.90), Oklahoma ($1.93), Ohio ($1.95), Michigan ($1.96), Kansas ($1.96) and Indiana ($1.97).
Overall, gas prices in New York are the highest of any state in the continental U.S. — an average of $2.76 statewide, according to AAA. Delivery costs drive prices higher in Alaska ($3.02) and Hawaii ($3.49).
Laskoski says he doesn't expect gas prices to fall much further.
"We will hit a floor in crude oil pricing, and we will hit a floor in gasoline prices," he said. "I can't tell you what that price is, but we're very close."
SLAHMAN@DemocratandChronicle.com