The Inevitability of $3 Gas

The national average price of a gallon of regular unleaded gasoline continued to climb overnight, and now stands at $2.88 per gallon.

With the busy summer driving season rapidly approaching and more people buying into the economic recovery — I think it’s just a head fake before the second leg down — it now appears that it is only a matter of time before the price of gasoline climbs back over the psychologically important barrier of $3 per gallon.

Today’s price of $2.88 is only slightly higher than a week ago ($2.86), and not much higher than a month ago ($2.80).  However, today’s price is over 40% higher than a year ago ($2.04) when we were still wondering if the financial system and the economy were about to collapse.

While the national average price of gasoline might be below $3, that certainly doesn’t mean some parts of the country haven’t already crossed that threshold.  Nine states and Washington, D.C., have an average price above $3 per gallon, with Hawaii having the most expensive gas at $3.65 per gallon.

Conversely, there are still several states that are well below the national average, with New Jersey reporting the lowest average price at $2.66 per gallon.

If the economy continues to show signs of improvement, and inflationary pressures on energy prices continue to increase, I think it’s fair to say we’ll all be sharing in the pain of $3 gas by Memorial Day weekend.

Comments

  1. Already well over 3.00 in most parts of Oregon. Have paid as much as 3.15 (and that was a couple of weeks ago). The local Chevron I usually go to has it at 3.07. I think your headline may have been closer to talk about the potentiality of 4.00 gas again. By Labor Day I suspect we’ll be closer to 4 than we are to 3. Nice to see the Liberals in Washington are NO DIFFERENT than the Republicans. They don’t care how much oil companies rake in.

  2. Wait until we stop drilling and gas goes to $7.00 a gallon.

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