Pain at the pump: Palm Beach County reaches $5 a gallon as gas prices continue to balloon

Susan Salisbury
·3 min read
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Palm Beach County on Monday became the first county in Florida to average $5 a gallon of gas.

And the news gets worse: Industry experts say the cost to drivers is likely to continue to climb.

Palm Beach County, which usually has the state's highest gas prices, reached $5.01 on average for a gallon of regular gas, according to the weekly briefing from AAA-The Auto Club Group.

More: Gas prices in Jupiter out of this world? It's all relative. Look at Boca | Frank Cerabino

The rest of Florida is just shy of the national average of $5 a gallon, standing at $4.89.

For two weeks in a row, gas prices increased by double digits. Prices rose by 17 cents in the past week. The week before, they went up by 18 cents.

Nationally, gas has topped $5 a gallon in 21 states and Washington.

Jessica Perez puts ten dollars of gas in her Toyota at the Circle K gas station and convenience store on Indiantown Road just west of Alternate Highway A1A in Jupiter.
Jessica Perez puts ten dollars of gas in her Toyota at the Circle K gas station and convenience store on Indiantown Road just west of Alternate Highway A1A in Jupiter.

Global oil prices, national inflation, demand outpacing supplies and instability surrounding the coronavirus pandemic and Russian invasion of Ukraine are all factors that continue to affect the cost, said AAA spokesman Mark Jenkins.

Wednesday, U.S. crude oil prices reached a three-month high of $122.11 per barrel. Gasoline is refined from crude oil, making its market price a major factor of cost passed on to motorists.

►Check out metro gas prices at GasPrices.AAA.com

"The continued uncertainty surrounding global supply and demand has made it extremely difficult to pin down any realistic expectations on when drivers will see meaningful relief from sky-high gas prices," Jenkins said in his weekly briefing. "The Florida average price for gasoline is likely to exceed $5 a gallon this summer, if not before the end of June. From there, drivers should expect gas prices to continue fluctuating throughout the rest of the year."

Howard Dobbs, 74, filled up his car at a suburban Delray Beach Mobil gas station on Monday afternoon.
Howard Dobbs, 74, filled up his car at a suburban Delray Beach Mobil gas station on Monday afternoon.

After Palm Beach County, among the next most-expensive markets was Fort Lauderdale ($4.93), and Port St. Lucie ($4.92). The least-expensive markets in Florida are in the Crestview-Fort Walton Beach area ($4.68), Pensacola ($4.68) and Panama City ($4.73).

Why does Palm Beach County have the state's highest-priced gas?

Experts at AAA Auto Club South and Gas Buddy say there are numerous reasons for the dubious distinction.

“The biggest difference-maker in Palm Beach County prices is based on the cost of living and operating a business. If it costs more to keep the lights on, then you are likely to find higher costs for consumers as well,” Jenkins said.

What other factors are to blame?

Competition, or a lack of competition

Stations near low-price leaders such as Costco and Sam’s Club are likely to offer lower prices, too. Conversely, if there is no large gasoline retailer in an area, prices tend to be higher.

Price zones

A pricing practice known as zoning takes into account the number of competing stations, number of vehicles, average traffic flow, population density, income level and more. Set by the gasoline suppliers, price zones can result in varying prices for the same brand at stations a few miles apart.

Motor fuel tax rates

At 39.4 cents per gallon in state and local taxes, plus 18.4 cents in federal taxes, that brings taxes to 57.7 cents per gallon in Palm Beach County. But 30 other Florida counties have the same gasoline taxes, the highest allowed in Florida.

Distribution cost

These vary depending on how far trucks have to travel from a terminal to gas stations. Palm Beach County has no gasoline terminal. Port Everglades in Broward County is South Florida’s primary storage and distribution center for refined petroleum products, and all of Palm Beach County’s gasoline comes from there.

Property taxes, insurance and leasing costs

These tend to be higher near airports and interstate on- and off-ramps and in higher-income municipalities such as Boca Raton and Jupiter.

The market

Station owners charge what the market will bear. In an affluent county, that ends up with prices being higher. Higher-income communities also tend to have fewer gas stations, resulting in less competition. What does it boil down to? They charge more because they can.

Karl Etters of the Tallahassee Democrat contributed to this report.

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This article originally appeared on Palm Beach Post: Florida gas prices: State seeing $5 a gallon with more hikes in store