Low Gas Prices Fuel Massive Holiday Travel
As millions of motorists get ready to hit the road over the Memorial Day Weekend, pump prices are the lowest they’ve been since 2009 in spite of recent increases in the cost of oil and refinery issues that have restricted the supply of gasoline in some areas.
The national average for regular unleaded gas was $2.73 Thursday, according to the AAA Daily Fuel Gauge Report. That is 5 cents higher than a week ago and 27 cents more than a month ago but 91 cents less than on May 21, 2014, giving motorists more money to spend on other things this holiday weekend.
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The average price for regular was around $3.65 per gallon the previous three Memorial Day weekends, so motorists this year are paying about 25 percent less. Memorial Day is widely regarded as the start of the summer driving season, when warm weather and vacation time encourage more travel.
For a vehicle that averages 25 mpg, paying 91 cents less per gallon would save around $36 over every 1,000 miles of driving.
Prices also rose the past week on diesel fuel, though only 2 cents to a national average of $2.88, $1.05 less than a year ago. Diesel has gone up only 9 cents the past month because it has not been affected as much by refinery issues or seen the same increase in demand as gasoline.
Higher oil prices are the main cause of recent increases at the pump. U.S. oil prices were running below $50 a barrel in early April but now are trading near $60. A $10 increase in the price of oil translates into roughly a 25-cent increase in a gallon of gas.
Moreover, production problems at several refineries have reduced the supply of gas regionally, helping drive up pump prices. AAA said the latest run up in Midwestern gas prices has been due in part to production issues at an ExxonMobil refinery in Channahon, Ill. The average price for regular surged 15 cents the past week to $2.85 in the Land of Lincoln. The average rose 7 cents in neighboring Missouri to $2.51 and 10 cents in Indiana to $2.65.
California and other western states have been hit hardest by refinery problems. The U.S. Energy Information Administration reported earlier this week that West Coast refineries were operating at 83.5 percent of capacity, compared to a national average of 92.4 percent.
California’s average price of $3.79 is 63 cents higher than a month ago, and by far the highest in the country, though the statewide average declined by a penny the past week. That is the first bit of relief motorists there have seen after weeks of higher prices brought on by reduced refinery production and the annual switch to summer gas blends, both of which crimped supplies.
Nearby states also have had significant increases recently. Nevada has the second highest average price for regular at $3.31, and Oregon, Utah and Washington now average more than $3. Alaska ($3.25) and Hawaii ($3.26) are also in the above $3 club.
With the recent price increases, only eight states averaged less than $2.50 for regular, led by South Carolina at $2.42. The average price was $2.45 in Mississippi and $2.46 in Louisiana and Oklahoma.
