The state Senate is expected to consider a proposal on Thursday to significantly increase New Jersey's gas tax in order to fund the nearly broke Transportation Trust Fund.

The plan, which calls for the gas tax to be 12.5 percent of the wholesale price of a gallon of gas, would mean a 23-cents-a-gallon hike if the wholesale price of gas is $1.80. But the tax would increase another 37.5 cents a gallon if the cost of gas suddenly increases to $3 a gallon.

If the proposal were to be approved and signed into law right now, the increase be about 19 cents a gallon because the wholesale price of gasoline is currently about $1.54 a gallon.

The proposed legislation would cap gas tax increases at $3 a gallon, meaning the 37.5 cent a gallon tax increase would apply even if wholesale prices shot up past $3.

With lower gas prices holding fairly steady over the past few years, that kind of a big increase might seem unlikely, but the experts tell us it could happen in the blink of an eye.

Here are some of the situations that could cause gas prices to spike.

The Middle East

“Over the course of history we’ve seen a wide variety of factors that have caused gas prices to spike, said Gregg Laskoski, a senior petroleum analyst for GasBuddy.com, which tracks consumer gas prices.

"When there is specific trouble in the Middle East, we often see the financial markets react with a great deal of nervousness, and that translates into rising global crude oil prices."

He noted even if there is only the threat of unrest in the Middle East, “those things can cause dramatic sudden spikes in wholesale and retail gasoline prices. It could be economic warfare, it can simply be threats. Sometimes it doesn’t have to take an act of war, sometimes it can simply be the threat of an act of war.”

The Weather

Laskoski said if a tropical storm or hurricane threatens the Gulf of Mexico, “where we have so much oil refining infrastructure, that can be problematic."

"It’s not uncommon to see retail price spikes. When storms are forecast to come in up toward the Florida panhandle or Texas or Louisiana, that is especially troublesome because so much of our oil because so much of our oil refining is centered there.”

Terrorism

Laskoski explained any event or potential event can cause a sudden price spike, which means “any kind of problems, military or otherwise, with the Middle East, with Islamic jihadists, any of these things that create turmoil.

"There are so many different potential scenarios, it’s hard to identify them all. But all of these in recent years have had an impact on crude oil prices. We can never rule out the possibility, and that’s one of the reasons we have to track these things 24 hours a day 7 days a week.”

Contact reporter David Matthau at David.Matthau@townsquaremedia.com

Sign up for the WPG Talk Radio 104.1 Newsletter

Get South Jersey news and information e-mailed to you every week.