If you haven’t been living under a rock, then you’ve probably noticed that gas prices are on their way down. In fact, over the last month, the price of gas has dropped an average of $0.18 a gallon, down from near-record highs of $3.90. There’s even better news – as we headed into Memorial Day and the official start of the summer travel season last year, gas prices were nearly $0.25/gallon higher than they are right now.
Now for the bad news: gas prices are still high – enormously high, especially when I think back to the summer I got my driver’s license. It was 1998, and I was 16 years old. I remember filling up the 10-gallon tank in my 1991 VW Jetta for less than $10; gas was routinely under $1 a gallon. If gas prices had held steady over the past 14 years (yes, I hear you laughing), I could fill up my Hyundai’s 18-gallon tank for $18, saving me nearly $50 every time I had to head to the gas station.
With the national average for a gallon of unleaded hovering around $2.72, how will gas prices impact your summer vacation?
California Isn’t Feeling The Love
If you’re reading this post from the West Coast, you might be thinking, “Gas prices have gone down? Really? Not around me!” No, your local gas station isn’t milking you for all you’re worth. Different parts of the country have seen gas prices move in different directions. While just about everyone east of the Rockies has seen some sort of price drop on gasoline, folks out in the Pacific time zone haven’t been as lucky. From Portland, Oregon to Seattle, Washington and down the coast, gas prices are actually climbing. In the state of Washington, the average for a gallon of regular unleaded has actually gone up $0.07 over the past month; it now stands at $4.20/gallon. It’s the same story down the coast in California, where the state average for regular gasoline has jumped $0.13 in the past month to $4.35.
The Seattle Times reports that it’s a simple issue of supply and demand. Due to scheduled maintenance at some West Coast refineries and a fire at Washington’s biggest refinery, gasoline inventory this month is at its lowest level since 1992. And, with just about everything else in a market economy, when supply is low and demand is high, prices soar too.
So what does this mean for your summer vacation plans? If you live on the West Coast, be prepared to shell out more at the pump over the next several months as these refineries come back online; if you’re traveling westward – especially by car – take a look at fuel prices at a site like AAA’s Daily Fuel Gauge, or use a gas cost calculator to estimate your gasoline costs before you go.
It’s Always Sunny In Philadelphia
If you live in Philadelphia, Chicago, Kansas City, or anywhere east of the Rocky Mountains, then your summer gas forecast is looking sunny. While the West Coast is suffering from high gas prices due to low inventories at its regional refineries, the East Coast is basking in the largest fuel supply inventory in over a decade. That news – plus the lessening of tensions between the U.S. and Iran in the Straits of Hormuz – has economists backing off their earlier predictions of a $4/gallon national average for regular gas by Memorial Day.
Here is some data from several key metropolitan areas:
- Baltimore, Maryland: $3.64/gallon (-$0.30/gallon since mid-April)
- Atlanta, Georgia: $3.55/gallon (-$0.28/gallon)
- Houston, Texas: $3.63/gallon (-$0.24/gallon)
- Cleveland, Ohio: $3.65/gallon (-$0.10/gallon)
- Boston, Massachusetts: $3.76/gallon (-$0.15/gallon)
Sharing The Roads
When gas prices are low, more people have the money to fill up their tanks. And when more people have the money to fill up their tanks, you can expect to see more drivers hitting the roads.
AAA expects nearly 35 million Americans to travel at least 50 miles from home over the Memorial Day weekend, the unofficial start of summer. Most of those travelers will get to their destinations by car: 30.7 million. That’s a predicted increase of 1.2 percent compared to last year, when the national average for gas was encroaching on the $4/gallon mark. AAA surveyed travelers to see how gas prices are affecting their getaway plans; more than half – a full 53 percent – said they aren’t really concerned about gas prices this summer.
How are gas prices impacting your summer vacation plans?