At the start of the Memorial Day holiday weekend, the average price for a gallon of regular gasoline in the United States is $2.97. That’s 25% higher than last year’s price of $2.37 a gallon and the highest price since 2014.
In California, a gallon of regular gas costs an average $3.73 a gallon today, compared to $3.10 a year ago, an increase of 20%. According to AAA, the highest gas price ever recorded in California was $4.67 a gallon in October 2012.
Residents of Mississippi are paying an average of $2.66 for a gallon of gasoline Saturday morning, and the highest price Mississippians have ever paid is $3.97 in July of 2008.
On Friday, the price of crude oil fell more than 4% to drop below $68 a barrel for the first time in nearly a month. The drop was the result of reported discussions between Saudi and Russian officials to increase crude oil production now that Brent crude prices have reached $80 a barrel. Continuously declining output from OPEC member Venezuela and the addition of new drilling rigs in the United States also played a role in Friday’s sharp drop in crude prices.
That drop, however, won’t show up in this weekend’s gas prices and is unlikely show up at all unless the price of crude oil stays at that level or falls lower. When crude prices jump, the impact on pump prices is nearly immediate. When crude prices plunge, the impact on pump prices takes much longer to appear. If the price bounces higher within a few days, the impact on pump prices never makes it to consumers.
In the United States, consumers typically don’t turn away from fossil fuel-powered cars until the price of gasoline approaches $4 a gallon. What that means for current pump prices is that they are likely to continue to rise through the summer.
In its latest projections, the U.S. Energy Information Administration forecast that gas prices would average $2.90 a gallon for the summer driving season this year (April through September) and reach a peak average of $2.97 a gallon in June. An increase in the average price to more than $3 a gallon is almost certain to occur by July 4. How much more and how long the price stays at that level are the remaining issues.