The price of gasoline continues to climb with a gallon of gasoline costing 50 cents more than it did at this time last year.
At $2.87, the national gas price average jumped 6 cents on the week in part due to the White House’s decision to re-impose sanctions on Iran, according to AAA’s weekly survey.
“The Administration’s move combined with the switchover to summer blend, growing global demand and shrinking supply continues to fuel pump prices as we approach the summer driving season,” said Jeanette Casselano, AAA spokesperson.
“AAA predicts that the national average may reach $3 a gallon this summer, especially if crude oil prices continue to increase,” she added.
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Motorists are seeing 19% of gas stations selling gas for $3.01 or more and the price of gasoline 16 cents higher than one month ago and 53 cents more than one year ago. As a result, 36 states are seeing gas prices that are a nickel or more expensive than last week, AAA reported.
Prices at the pump now top $3 per gallon all of the nation’s 10 most expensive markets with California at $3.69 per gallon. Hawaii at $3.67 per gallon, Washington at $3.38, Alaska at $3.31, Nevada at $3.30, Oregon at $3.28, Utah at $3.15, Idaho at $3.14, Connecticut at $3.04 and Pennsylvania at $3.04.
The rising gasoline prices are also beginning to have an impact on the economy.
(Click Here for more on rising demand, shrinking supply causing surge in fuel prices.)
The federal tax reform package signed into law late last year reduced rates for individuals and married couples. The average middle-class American is expected to save about $930 in 2018 taxes under the law, according to the Tax Policy Center.
The jump in gasoline prices the past year, if sustained, would cost the average American $450 a year, offsetting about half the tax benefit, Mark Zandi, chief economist of Moody’s Analytics, said in an interview published last week.
Higher gasoline prices also contribute to inflationary pressures, making it more likely that the Federal Reserve Board will boost interest rates.
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Meanwhile, the price of crude oil climbed to new highs for 2018 last week, following President Donald Trump’s decision to re-impose economic sanctions on Iran and withdraw the U.S. from the Iran Nuclear Deal in a move that could limit the amount of crude oil available on world markets.