Better access to crude oil, driven by shale oil and refinery capacity, were supposed to slow or reverse the rising price of gasoline well before the summer driving season. That has not happened, as gas prices have jumped across most states. And that trend shows no sign of slowing.
According to the carefully followed Lundberg Survey, which releases gas prices every two weeks, the cost of an average gallon of regular was up 10 cents in the most recently measured period. The research firm put the figure at $3.51. The AAA Fuel Gauge, which also measures gas prices nationwide, put the average price per gallon of regular at $3.488, up 18% from $3.269 a month ago. If the rise continues, the price could soon be back to $3.703 where it was a year ago.
As has always been the case, prices vary substantially from state to state. The current price for regular in California, the largest state by population, is $3.906. It is above $3.70 in New York. The average price for a gallon of premium is above $4 in populous states, including California, New York, Illinois, Michigan, New Jersey, Ohio and Pennsylvania. Among them, these seven states hold well over a quarter of American’s total population.
Economists endlessly debate two questions related to gas prices. The first is the effect of crude prices, which have been above $100 a barrel for several weeks. Some of the increases may be offset by refinery capacity, but if oil rises more, that capacity cannot continue to hold down gas prices indefinitely.
The other argument involves the effect of gas prices on the general economy, particularly because of the evidence that the overall recovery in the United States has not mirrored recoveries after other recent recessions. That is probably because of the depth of the most recent one. For middle and lower class Americans, the rise in gas prices among those who must drive any distance has to bite.
Gasoline prices, for the past several months a bright spot in the economy, have quickly become an adversary.