Long Island gas prices jump 10 cents as war in Iran hits oil costs, distribution

Gas prices on Long Island jumped 10 cents overnight Wednesday, with the average price of regular gasoline across Nassau and Suffolk counties hitting $3 a gallon, and industry experts warning of the war in Iran's potential to drive up consumer costs at the pump and beyond.

A gallon of regular gasoline on Long Island was $2.90 on Tuesday, an increase of roughly 3 cents from Monday, according to AAA’s online fuel price tracker.

The ongoing U.S.-Israel war with Iran, which started Saturday and continued Wednesday, has driven up crude oil prices and severely impacted oil refinery operations in the Middle East, AAA Northeast said Wednesday.

Long Island gas prices are up 14 cents from a week ago, the roadside assistance nonprofit said.

Nationally, gas prices jumped 9 cents from Tuesday into Wednesday and were up to $3.19 a gallon, 22 cents higher than they were last week. 

Crude oil prices were $75.67 a barrel in late-day trading Wednesday. By comparison, prices per barrel were about $65 last week before the war began, Robert Sinclair Jr., senior manager of public affairs at AAA Northeast, told Newsday.

"Long Island is catching up with other markets," Sinclair said, adding that Nassau and Suffolk counties have traditionally enjoyed a lower price at the pump due to efficiencies in gas distribution.

"Retailers are coming to the obvious conclusion that this is something that is going to affect everybody," he said.

Reaching $3 a gallon marks a significant "pain point" for many drivers, particularly for lower income families, he added.

According to a national 2022 survey, 40% of respondents said $3 or more per gallon would be the point at which they would start "pulling back on the family budget," combining errands with their work commute to reduce drive time and putting off major household purchases like new appliances, Sinclair said.

More than half of respondents, 59%, said they would make spending changes if gas hit $4 per gallon.

"Those that are struggling, living on the edge, so to speak, will start to feel an impact," Sinclair said. 

Mariano Torras, an economics professor and chair of Adelphi University's Finance and Economics Department, told Newsday increased fuel prices are already having a negative effect on consumer spending. If disruptions in supply lines continue to drive up energy costs globally, Torras said, the impact could be severe. 

"Petroleum is still an important part of the infrastructure of our economy," he said.

Torras said energy costs affect everything, from the powering of factories that make consumer goods, to the transport and delivery of those goods to Long Island.

"Even the clothes we wear are majority plastics," he said. "That all comes from fossil fuels."

The longer the conflict in Iran goes on, Torras said, the closer to widespread inflation the region becomes. 

"It’s not clear that we’re facing more inflation, but if this thing were to persist, I don’t see how we could resist inflation across the board," he said. "Everyone is hoping it’s not a long-term thing because it could have a major, major impact on prices everywhere."