Gasoline Prices High for 7 Years, Just in Time for Memorial Day

This time around, the pressure could be triggered by the lack of tanker drivers to deliver fuel, and a repeat of panic buying by travelers filling their tanks.

“I think we need to be worried about prices, supply and crowd behavior,” said Tom Kloza, global head of energy analysis for the Oil Price Information Service, which tracks prices. gas for AAA.

First, the prices: The national average cost of a gallon of regular gasoline is now $ 3.04, according to AAA, essentially matching the seven-year high set earlier this month, and up 58% from compared to a year ago.

Last year, home orders at the start of the pandemic caused oil and gas prices to collapse, bringing the average price per gallon to less than $ 2. But even compared to Memorial Day 2019, prices are still up 7%.
Rising oil prices caused by an upturn in economic activity and the subsequent demand for fuel are behind this increase. The start of the summer driving season this weekend will also boost demand and add further pressure on prices, as will the annual requirement that gas stations switch to the more expensive “summer mix” designed to reduce fuel consumption. seasonal smog.

But prices vary widely at some 150,000 stations nationwide, partly due to variable taxes and fees, and partly due to the fuel supply to refineries in specific regions. Only a third of U.S. stations sell gasoline for more than $ 3 a gallon, but areas with even higher prices push up the national average. Even so, the most common price nationwide is only a tenth of a cent below $ 3.

For example: virtually all stations in California sell gasoline for $ 3.75 or more, with the average price for regular gasoline at a national high of $ 4.17. Meanwhile, Louisiana and Mississippi have a national low of $ 2.72 per gallon, with almost no stations in either state charging $ 3.

A repeat of the shortages?

Despite the high prices, a potential gas shortage is emerging as perhaps the most serious problem this summer.

A glimpse of what that might look like came earlier this month when the Colonial Pipeline, a major artery supplying fuel from refineries from the Gulf Coast to the East Coast, was closed for about a week due to ‘a cyberattack, causing widespread blackouts in many stations. States.

But experts aren’t as worried about another malicious hack as they are about a critical shortage of qualified truckers to drive the tankers that deliver gasoline to stations.

An estimated 20% to 25% of tank trucks are currently parked due to a shortage of drivers, according to National Tank Truck Carriers, the industry’s trade group. But even before the pandemic, there was a shortage of drivers as the industry lost a number during the economic downturn that sank demand for gas.
Coming this summer: gas stations running out of gas

The supply shortage could initially affect only a few small independent stations. But the worry is that even a handful of dry resorts could trigger panic shopping, especially in seaside communities and other vacation hot spots.

After all, nervous drivers filling their tanks were just as big a cause of the recent shortage as the colonial shutdown, Kloza said. And new memories of that shortage only make that kind of panic buying more likely, he added.

“I think the propensity for panic among the population is much, much higher than it has been,” Kloza said.


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