Fireworks at the pump! July 4th gas prices hit 5 year high
According to AAA more than 41 million Americans are going to be travelling more than 50 miles from home this week to celebrate July 4th. That’s a nearly 2% increase over last year. As usual, the vast majority of vacationers will be driving. Unfortunately for those motorists they’re going to find gas prices an average of 20-cents a gallon higher than last year and at levels that haven’t been seen this time of year since way back in 2008.
American Fuel and Petrochemicals Manufacturers President Charlie Drevna says things could be much worse. In the attached clip Drevna concedes that gas prices are pushing higher but claims only the efforts of the industries he represents stand between the US and skyrocketing prices triggered by global unrest.
“You have to look at what (gas prices) would be if we hadn’t produced an additional 3.1 million barrels of oil a day over the last 2 or 3 years” Dravna claims, “One could only imagine what prices could be now.”
It’s a somewhat strange argument and not likely to provide much solace when you’re getting gouged at the pump but Dravna sees the fact that demand for gas in the face of higher prices as a positive tell for the economy. Indeed prices for hotels are up 15% compared to last year and shares of Disney (DIS), perhaps the American company most levered to affordable travel is making record highs today as the Dow pushes to 17,000.
Inflation?
Eventually all these relatively subdued price increases are going to add up to inflation but at least so far America’s worst fears have yet to be realized. Food prices spiked in May but have settled in the commodity pits thanks to solid crop reports. Airfares are actually down a reasonable amount from last year.
To be sure this could be an uncomfortable July 4th for motorists but seasonally the worst should be behind us. By Labor Day we’ll have a better view of just how big a hit Americans are taking at the pumps this summer.
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