Why do gas prices keep going up? Here’s what to know before Fourth of July weekend
After a small dip in gas prices in June, the average cost at the pump is on the rise again just before the Fourth of July.
The average price of unleaded gas Tuesday in the United States is $3.10 per gallon, according to AAA. Nearly 90% of gas stations in the country are selling gas at more than $2.75 per gallon.
If the prices stay steady, it’ll be the most expensive Fourth of July weekend at the pump since 2014, when the average cost per gallon was $3.66, AAA reported.
Experts fear Americans may be in for a costly summer at the pump.
Why are gas prices rising?
The Energy Information Administration predicted earlier this month the average cost per gallon for gas for April to September would be $2.92, up from $2.07 per gallon last year.
Americans are expected to use 9.1 million barrels of gas per day from April to September — 1.3 million more than last year, the EIA said.
As has been the case for most of 2021 while the economy recovers from the COVID-19 pandemic, demand continues to fuel the increase in gas prices.
“As we approach July 4, it appears the only way forward is for gas prices to continue to rise as Americans’ insatiable demand for gasoline continues to act as a catalyst,” said Patrick De Haan, head of petroleum analysis for GasBuddy.
De Haan reiterated on Twitter that the rise in gas prices is not political.
“It’s not a Republican or Democrat issue — it’s that the nation is mending from Covid 19 and *we want to get outside*!” De Haan tweeted. “We’ll continue to see prices rise as the economy and outlook improves and people feel better. No way Americans are OK ’losing’ two summers in a row.”
Making matters worse: Gas shortages
Unrelated to May’s fuel shortage following a cyberattack on the Colonial Pipeline, some gas stations are running low on fuel once again.
This time it’s because of a shortage of tank trunk drivers, along with the high demand, according to CNN.
“It used to be an afterthought for station owners to schedule truck deliveries. Now it’s job No. 1,” Tom Kloza, global head of energy analysis for the Oil Price Information Service, told CNN. “What I’m worried about for July is the increased demand works out to about 2,500 to 3,000 more deliveries needed every day. There just aren’t the drivers to do that.”
De Haan said there are no issues with the production of fuel, just the number of truck drivers.
“The problem is there aren’t enough truck drivers to keep up with deliveries, made worse by the pandemic as some truckers left for jobs elsewhere or were let go,” according to Gas Buddy.
When will prices decrease?
By September, the average cost per gallon of gas is expected to drop to $2.76, the EIA projects.
This falls in line with what Federal Reserve Chair Jerome Powell said last week about price gains this year for many commodities. He said the inflation is temporary and has been due to demand as the economy has reopened, according to the Associated Press.
“The incoming data are very much consistent with the view that these are factors that will wane over time and then inflation will then move down toward our goals,” Powell said.
Prices may not fall immediately after July Fourth weekend, however. De Haan said hurricane season could factor in to a rise in prices during the summer.
Largest weekly increases, according to AAA
Utah: 12 cents
Indiana: 11 cents
Oregon: 9 cents
Washington: 9 cents
New Mexico: 8 cents
Most expensive markets, according to AAA
California: $4.27 per gallon
Hawaii: $4.00 per gallon
Washington: $3.73 per gallon
Nevada: $3.72 per gallon
Oregon: $3.58 per gallon
Least expensive markets, according to AAA
Mississippi: $2.73 per gallon
Louisiana: $2.75 per gallon
Texas: $2.79 per gallon
Arkansas: $2.80 per gallon
Alabama: $2.81 per gallon
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