National Average Gas Price Breaks $3 Per Gallon

After much anticipation, the national average gas price has finally broken $3 per gallon, and looks to continue its rapid increase for the foreseeable future.

According to GasBuddy, the national average price for a gallon of regular unleaded gasoline cracked the $3 mark late in the evening on May 1st. At the same time last year, gas prices were at $2.90 per gallon – roughly 3.5% lower.

Since the first of the year, gas prices have risen over 25% and have risen over 10% in the last month alone.

Now there are 14 states plus Washington, D.C. that are reporting average gas prices above $3 per gallon. Just two days ago, there were only eight states (plus D.C.) that were reporting $3 gas. The lowest state-wide average gas price is in New Jersey, where a gallon of gasoline runs $2.80, and the highest state-wide average is in California, where a gallon of gas runs $3.38.

With the news that two refineries in Iowa were left short of fuel over this past weekend – which illustrates the very delicate balance between supply and demand – it certainly seems that the run up on the price of gas is just beginning, and that we’re likely to shatter the record high gas prices seen during the last two summers.

I hope you got a chance to enjoy that cheap gas while it lasted, because chances are these high gas prices are here to stay for good.

Comments

  1. Mike.Gayner says:

    Who the fuck cares? Here in NZ, it’s been $1.60/litre for ages – that’s USD$4.50/gallon, so cry me a river.

  2. this makes me really want to have a high MPG car. I’m a social worker and my commute to work is quickly becoming something I can’t afford.

    http://www.cheapgreencar.com

  3. To Mike-

    how many miles do you commute daily for work? just out of curiosity.

  4. Big oil co’s are price gouging us. Suppy and demand is a bunch of BS. They’re making record profft’s while the nornal consumer is paying the price. Goverment NEEDS to step in and CAP GAS PRICES!!! Gas shouldn’t be no more the 2$ at any given time!!!!!

  5. Mike
    You need to cry me a river If you people would stand up and be heard instead of being scared maybe you could protest and stop and force the gas prices down. So yea CRY ME A RIVER!!!!

  6. cadaver says:

    oil companies know that demand is inelastic and so they are raping us as much as they can. the demand is not going to go down the more you raise gas prices big oil, people still need to go places.
    i think they are spelling their own doom each time they raise the prices because people are going to start to realize that there are other means of powering cars. Katrina was the excuse last year what is it this year eh?

    Fuck oil companies

  7. Who cares? We shouldn’t be wasting natural resources on having our fat asses moved around, especially if you are driving to the gym. Oh the irony. I ride my bike to work each day, 1000 ft lattitude each way, 12 miles round trip. And I am usually only around 10 minutes slower than by car. It takes time and money to park and walk from the parking garage you know. not to mention rush hour. I am not a bike addict, just someone who wants to use alternative transportation. get off your fat asses and ride.

  8. In Britain it’s £0.90 a litre roughly. That’s about £3.40 a gallon, or around $7. So there. The US would be a lot better off if they started driving cars that weren’t fuel guzzlers in the first place, over here £20 ($40 roughly) Can last me a week, driving 20 miles a day. You might have cheaper fuel but you use it so carelessly.

  9. oil consumer says:

    Look — the world price of oil is set by (i) buyers (like Valero, who in turn sell it to us) and (ii) sellers. But the latter isn’t who you think it is. Only about 1/3 of oil production comes from Shell, BP, ExonMobil, etc. The rest comes from countries and their state-owned companies, like Saudi Aramco. These companies don’t face the usual profit motive as quite a bit of the revenue goes into state projects. Venezuela’s production is down by 1/2 in the last few years as funds have gone to projects supported by Chavez. Rising demand around the world is pretty much driving the world price of oil. As on analyst put it crudely, oil companies are greedy, but they’ve always been that way. You can’t explain current prices by greed as it has always been there.

    The U.S. price of gas pretty much follows the world price of oil. One exception was Katrina, when something like 5% of U.S. gasoline production was lost. If prices hadn’t rises to reduce driving, we would have been looking at lines at the pump. Take your pick: higher prices or lines. There was NO third option. Put another way, the gas market did exactly what it was supposed to do — let prices reflect events and then let people make decisions based on that. The government couldn’t magically produce gasoline or make anybody else do it. It simply wasn’t available for a time.

    On oil company profits, yes, they’re large, but of their total sales, how much are profits? About 10%. Cut the profits in half (or entirely) and the impact at the pump would be minor.

    It is amazing how much misinformation there is about this market. People would rather complain than learn. And, yes, I drive a RAV4 25 miles to work most days.

  10. colinnwn says:

    Nobody is “raping” or “gouging” anybody on gas in the US. Gouging is not when the price is higher than you think is reasonable. Gouging is pricing above the market rate when an alternative supplier is not available. This does not occur in the US wholesale or retail gas market.

    Gas is expensive because we are close to Hubert’s oil peak http://en.wikipedia.org/wiki/Peak_oil and add to this China is rapidly trying to modernize and is on a world energy buying tear. Decreasing supply and increasing demand is a recipe for MUCH higher gas prices.

    And to be honest, the US subsidizes gas prices indirectly. As well there are many externalities of burning gas that are not priced into the cost you pay per gallon.

    The US should place a 100% or MORE tax on gasoline to account for these subsidies and externalities, as long as that money was used exclusively for alternative energy research and practical mass transit infrastructure.

  11. Ahem, guys at the current exchange rate its over $7 per gallon in the UK, something to bear in mind.

  12. Get over it and buy some stock in the oil company. If you can’t walk, ride a bike, take the bus or train and you have to drive then just don’t look at the price.

  13. a lot of the international commenters make good points here. The price of gas in the US is relatively cheap considering the world market. Maybe we’re just starting to catch up? I still think the US really need to look at oil independence though. That and new technologies that will really help to change the situation. Let the inventors and capitalists do what they do best and bring innovation to the table.

  14. Good point Matt. Too many Americans feel that if they can afford it, there’s no problem with buying a hulking SUV or truck, driving half a block to a neighbor’s, or drive solo when carpooling is an option. The problem is that even if they can afford it, the increase in demand they cause can push the price of oil and gasoline beyond the level that others can afford.
    There is a certain lack of caring that really looking to be downright dangerous in the not-too-distant future.

  15. Smitty says:

    The oul industry traditionally is up and down. For many years the oil companies made very little money, now they are making a lot, but in many cases they are also the ones that are creating new technologies.

    There is so much disinformation out there.

    Lets look at a few:
    1) Alternative sources of “fuel.”
    Ethenol is hot right now everyone is talking about corn based material. If every acre of crop in the US was converted to corn it would supply less then 20 percent of our needs. It would destroy the agricultural base in this countey and it ALREADY has increased the price of tortillas so much that they are marching in the streets of Mexico. I have a major ethical problem with using corn to run my car or purchase something made of plastic when there are so many starving people in this world.

    2) Plastic is evil.
    Plastics gets a bad rap because of all the bags flying around in the wind, and all of the debris that floats in the ocean. Is plastic really the problem or is it the people that litter and throw their garbage onto the side of the road. Try living without plastics and see who is marching in the streets.

    3) Plastic is made from oil…
    YES plastic is made from oil, but for the most part in this country much of it comes from natural gas dispelling the myth that plastics are a major part of the blame for the high oil prices.

    4) Supply and Demand has nothing to do with the rise of oil prices…
    FALSE… Supply and demand is an intrigal part of any product in the market place today. When consumers need or want something really bad the price goes up over time. Consumption is up all over the world not just in the US. Has anyone looked at China and their consumption. It’s almost as much as the US and will exceed our needs in the near future.

    Everything is recyclable…
    Not true… A lot of plastics can be recycled, but in many cases it does not make economic sense for whatever reason. Recycling is a great thing and everyone should recycle. How about the staes that have very low tipping fees (Fees at the dump) California has some of the lowest dumping fees in the country $15.00 a ton+/- what would happen if they raised that to 115.00 a ton and the price was passed to the consumer. A lot more material would be recycled rather then put in the can.

    ***Lastly. I am sick and tired of hearing people blame everyone else but themselves for much of the problem. They makes comments about how we need alternative fuels and how we drive too much. But then they hop into their oversized SUV drive a half a block to the store and buy a gallon of milk; which by the way is either in a plastic jar or in a paper container that is lined with plastic.
    We could all do our part and be conscious about wate; everything from paper to grains. STOP blaming just the industry turn your finger around point it right between your own eyes and start blaming yourself for once;I know I have and I am changing my ways, but I am also not a fanatic who thinks thinking this world is coming to an end.
    We have not built a refinery in this country in over 20 years. It’s called the NIMBY effect. (Not In My Back Yard.) Ask who is to blame Just industry? NOT!!!

    You complain about the price of gas, while it has risen substantially over the last 2 years, compare it to the price of milk & inflation and you will get a much bigger picture.

    And by the way Silicon based materials are not an alternative to most petrochemical based materials. Then ask yourself how silicone is made, and before you start preaching about the benefits of silicone vs petrochemicals research it.

    Wake up and stop blaming someone else for issues/problems we are having!!

  16. I hope it goes to $5 a gallon… that will clear the raods so I can drive my Lotus faster!!

  17. Euroman says:

    This is just super! I hope you reach Euro prices soon :)

  18. You can’t even spell road!!

  19. you rock

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