Prices are high now, $6/gallon would be a catastrophe.
Another milestone. Now all 50 states are experiencing fuel retail prices over $4 a gallon. According to AAA, Oklahoma has the cheapest gas at $4.03 a gallon and California has the most expensive gas with an average of $6.06/gal. Tighter supply and increased demand have pushed gas prices higher, according to the association.
Summer driving will be expensive this year. Very expensive.
Andrew Gross, the national spokesman for AAA Inc. stated that drivers should expect higher prices throughout the summer. “Typically this time of year we are in a little bit of a lull. There is often a demand lull between spring break and Memorial Day and we had a little bit of it about two weeks ago, but then last week, … there was actually an increase, which is very unusual. I don’t think I’ve ever seen that.”
“You have this increased demand as well as these really elevated oil prices,” he added, pointing out that “the price of oil has been stuck in this weird range of $100 a barrel to $110 a barrel.”
“It meets resistance when it hits $110 and then it drops back down, but then it meets resistance to drop below $100 and so it’s in this uncomfortably high area,” Gross continued.
“To put it in perspective, back in August, a barrel of oil was about $64 so we’re $40 plus more and that’s putting a lot of upward pressure because oil accounts for about 60% of the cost of what you pay at the pump, so the more expensive the oil, the more expensive the gasoline,” Gross noted.
When will it end? Anybody’s guess. Time to go electric.
AAA said that the volatile crude prices coupled with the supply/demand dynamic will likely continue to keep upward pressure on gas prices. “The oil market is a lot like the stock market and we’ve seen the stock market all over the place,” Gross said.
“Driving habits haven’t seemed to change so that’s something to keep your eye on over the next few weeks and months,” he added. “With these higher prices, at what point will people decide I’m going to stay home or I’m going to ride a bike.”
“It’s really an interesting time right now,” he stressed.
“I think a lot of people are probably looking at electric vehicles a lot more seriously now,” Gross added.
How to save on gas
If you are still planning to hit the road, there are ways to shield yourself somewhat from soaring prices at the pump. Consumer savings expert Andrea Woroch has these tips:
- Monitor prices. Powerful, easy-to-use apps such as GasBuddy, Gas Guru and AAA TripTik will find the cheapest price per gallon — savings can add up to hundreds of dollars a year.
- Use cash. Price per gallon can typically be up to 15 cents cheaper using cash than per gallon for credit card transactions. Pay with cash — and bring a lot.
- Have a travel strategy. Carpooling, ride shares using sites such as ZimRide, RideJoy or eRideShare.com, Woroch can help. Order online and look for free delivery to cut the cost of getting groceries, takeout and other daily essentials.
- Sign up for loyalty programs. In addition, loyalty programs, which many major gas station chains have, can help offset the price at the pump. Some grocery store chains may also offer cents-per-gallon rewards. For example, Kroger and Shop & Stop give fuel points for every $1 spent on groceries, which can be redeemed at participating gas stations.