Gas tax relief seems short lived as prices shoot back up

It's official. A gallon of regular gas has hit $5 dollars in some areas of New York State.

It's been one week since the state and 13 counties provided some gas tax relief, but it was surely short lived, with prices at the pump shooting back up.

AAA is reporting that the average cost for a gallon in New York is now $4.95, with some counties like Dutchess County averaging more than $5.

Residents filling up there say they can’t stand the sight of their gas meter.

It’s a lot. It’s frustrating. It’s not ideal and I think things are complicated in the world right now,” said one customer.

“I am shocked because I know there’s a lot of smart people that can figure out a solution to this problem,” said another.

MORE:'It could get even uglier': Record-high gas prices to climb through summer, expert says

It seems like the gas tax relief came and went quickly, but this was something that officials including Governor Hochul warned about months ago, before approving any gas tax suspension.

While speaking with reporters on March 11, Hochul said, “We also know that as prices continue to escalate— now $4.07, $4.27, it’s continuing to go up. It could go up to six dollars a gallon is what we’re hearing today— I can’t guarantee that the savings from not having to pay $.10 or $.18 or $.20 a gallon is going to end up in the consumer’s pocket.”

Experts say the worst may still be to come.

Oil prices are the biggest factor affecting fuel costs.

Goldman Sachs is now forecasting crude oil prices will average $140 a barrel this summer. currently, oil is about $120 a barrel.

Sean Leonard, Chief Investment Officer with financial advisory company Graypoint LLC, said the big driver for prices to drop is increasing production in the U.S.

MORE:Experts warning that gas prices could be over $5 soon

“Then the second part of it is increased refinery capacity globally. So the Middle East, they’re adding capacity. China has been offline because of COVID, that capacity should come back into play,” Leonard said.

“If we can make it through the summer then there’s a chance in the winter to build inventory again so maybe heading into next year there’s a chance that prices come down,” he added.

However, he says it might take a couple years before we see prices drop down to $3 a gallon.