Gas Prices Now Higher Than a Year Ago

The national average price of a gallon of regular unleaded gasoline has been on a steady climb over the past month as there have been signs of stabilization in the economy, along with the price of oil hitting 12 month highs and the value of the dollar falling to 12 month lows.

Currently, the national average price for gas stands at $2.68 per gallon, which is up roughly nine percent over the past month ($2.46).  Additionally, the current price is up nearly 12 percent over where it was exactly one year ago ($2.40), when prices had just started their dramatic decrease.

There are three states with an average gas price above $3 per gallon: California ($3.01); Hawaii ($3.21); and Alaska ($3.54).  Both South Carolina and Wyoming have the lowest state-wide average gas price at $2.44 per gallon.

Many economists are worried that rising energy prices will put a damper on recent economic gains, and will actually cause a “double dip” in the economy, pushing us back into (or simply prolonging the current) recession.  Considering most of the pop in the recent GDP report came from government spending and not from strong consumer spending, this seems to be a pretty logical (and likely) scenario.

While most of us were able to make it through the brief period of $4 gas prices, at that time we weren’t dealing with the worst recession since the Great Depression, nor did we have double digit unemployment.  If gas prices were to climb that high again, especially now, I think it would cause a lot more pain than the first time around.

Unfortunately, since the Federal Reserve has instituted many “easy money” policies and increased the money supply dramatically, I’m afraid prices have no where to go but up – even in a down economy.