As Holiday Travel Rises, So Do Gas Prices
CARS.COM — Even as gas prices continue to rise, the AAA travel-services organization predicts that a record number of Americans will travel this holiday season. AAA projects that 103 million Americans will travel between Dec. 23 and Jan. 2, a 1.5-percent increase over last year — and more than 90 percent of those travelers will do so by car.
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AAA said “improvements in the labor market and rising wages” as well as “low gas prices and increased consumer optimism” have encouraged Americans to hit the road. But gas isn’t as affordable as it was around Thanksgiving or at this time last year. The AAA Daily Fuel Gauge Report said Wednesday that the national average of $2.25 a gallon for regular was 5 cents higher than a week ago, 11 cents higher than a month ago and 25 cents higher than a year ago, when the average had slipped just under $2 to $1.998.
Prices have climbed since late November, when the Organization of Petroleum Exporting Countries agreed to cut oil production starting in January. Other oil-producing countries have agreed to cuts as well, and oil and pump prices are expected to rise as a result. Since the OPEC agreement, the price of U.S. oil has climbed from about $43 a barrel to nearly $54.
Patrick DeHaan, senior analyst for price-tracker GasBuddy.com, said “retail gasoline prices continue to play a game of catch-up to the three-week rally in oil prices.”
“We’re on (pace) to see the largest December increase in gasoline prices nationally since 2010 due to the uptick in oil prices,” DeHaan said in a blog post.
DeHaan noted that “prices will likely fall, at least temporarily, starting in mid-January through Valentine’s Day as refiners begin discounting excess inventories of winter-grade fuel.”
Pump prices typically decline in December, and GasBuddy said they fell by an average of 12 cents over the last five years. This year, though, many states have seen double-digit increases, of which the Great Lakes area has seen some of the biggest. Over the past four weeks, average prices have risen by 20 cents a gallon in Indiana and Wisconsin, 25 cents in Illinois and 28 cents in Michigan.
GasBuddy said that a year ago 69 percent of U.S. gas stations were selling regular for less than $2 a gallon, but now it is only 14 percent. At this time last year, the average price of regular was under $2 in more than half the states. This year, AAA says the lowest statewide averages are $2.03, in South Carolina, and $2.04, in Arkansas and Oklahoma. (Prices fluctuate throughout the day and could change.)
Regular averaged more than $2.50 a gallon in four states on Wednesday — Alaska, California, Hawaii and Washington — and in the District of Columbia. Hawaii had the highest average price at $2.96. Premium gas rose 3 cents the past week to $2.50, and diesel fuel was up 2 cents to $2.45. Premium is 23 cents higher than a year ago, and diesel is 14 cents higher.
Looking on the bright side, two years ago the average prices were $2.41 for regular, $2.82 for premium and $3.28 for diesel. At this time in 2013, regular averaged $3.25 nationally and was less than $3 in only five states.
