Scroll through any of your social media feeds, and there’s one topic that seems to trend the most: gas prices. With prices over $5 a gallon in several parts of the country now, prices are likely to remain there in the near future. However, there may be some rays of hope.
Traditionally, Memorial Day Weekend in the US kicks off the summer driving season, and many Americans forged forward with previously delayed travel plans and ventured onto the roads. With that, gasoline prices took off as well.
According to AAA, the national average price per gallon of regular gas on June 6 was $4.865. That was a 5% increase from a mere week prior. Prices are up 14% over the past month, and 60% over the past year.
“It now appears not if, but when, we’ll hit that psychologically critical $5 national average,” said Patrick DeHaan, the head of petroleum analysis with GasBuddy.
However, the problem according to DeHaan is “a culmination of less refining capacity than we had prior to COVID and strong consumption, a situation that doesn’t look to improve drastically anytime soon.” In addition, during the pandemic, several U.S. refineries also closed, bringing the total number of operating refineries in the U.S. to 129 at the beginning of 2021, according to Energy Information Data. Due to this, the closures brought refining capacity down by nearly 1 million barrels a day to 18.1 million.
More Increases To Come
Per The Street, commodities researchers with JP Morgan noted in mid-May that the national average price per gallon could rocket to $6.20 by August. At the time, DeHaan tweeted, “I just don’t see the stars aligning to see the national average get to the $6/gal level. However – there’s little margin for error.” On that note, DeHaan also tweeted on June 5, that Americans are “spending $1.82 billion on gasoline ~ every 24 hours.”
So What’s The Good News?
Unfortunately, the best tool, might not always be the easiest, which is driving less. Yes, gasoline demand can be required by required driving such as commutes, taking kids to school, errands, delivery routes, and more, but some aren’t.
For example, vacation travel can be deferred if necessary. Ultimately though, the determining factor is the price. With that, there is some reason for hope, even if small.
U.S. gasoline demand fell 2.3% last week compared to the prior week according to GasBuddy data. Demand was also down 1.5% below the rolling four-week average. Another reduction in demand could also come from a slowly but surely increasing number of electric vehicles out on the roads. Sure only 1% of EVs make up the percentage of U.S. autos, but in 2021, 20% of passenger cars that were bought were electric.
Finally, another added aspect of relief could be the effects of working from home. Even though some companies might be returning some workers to return to the office, or at least going the hybrid version of some days a week in the office, many Americans continue to work from their home offices. In turn, this has led to less commuting and ease of price pressures.
Speaking of GasBuddy, I have thoroughly enjoyed using their Pay With Gas Buddy card. It can connect with your bank account, so when you go to pay at the pump, you can get a slight discount. It may not be substantial, but every little bit definitely helps, and it’s free! They do have a premium subscription that you can sign up for, for higher discounts and additional benefits.
Another app that may help you save at the pump that I recently heard about is Upside. You’ll get 25 cents per gallon in addition to the 15-cent bonus via the link above, or code EVNGCR for the first time you use the app. I’ll also get an extra 15 cents per gallon in cashback as well after you use the app, so many thanks in advance should you choose to do so!