The nationwide average of gas prices could jump to more than $6 a gallon by the end of summer, JP Morgan analysts warned Wednesday. The guidance comes as gas prices hit a record high of $4.59 a gallon Friday, breaking Thursday’s record of $4.58, with no end to the accelerating prices in sight.
The Automobile Association of America reports that national average gas prices in the U.S. have increased for the past 11 consecutive days and says this is “unprecedented.”
U.S. Secretary of Energy Jennifer Granholm admits more negative news on gas prices and inflation lies ahead, saying, "I think prices are not going to come down in the next few months. I mean, the summer driving season, you only see an increase in demand, and that's when prices usually go up even further.”
The summer driving season will undoubtedly be impacted, as 7 in 10 Americans have changed their vacation plans due to inflation, an April Bankrate survey found.
Granholm further predicts the nationwide average price for gas will remain above $4 a gallon for the rest of the year, adding, “The issue is not going to go away anytime soon.”
Data from AAA shows regular unleaded gas prices have risen above $4 a gallon in all 50 states, with prices varying from a high in California, where gas is already above $6 a gallon, to Oklahoma’s statewide average of $4.03.
Gas Prices Burning Through Wallets
Diesel has seen a particularly sharp increase, rising to $5.5 a gallon nationally, up from $5.04 one month ago, an increase of 46 cents in a month. In the Philadelphia region, diesel is above $6 a gallon, leading to higher prices for airfares, thereby affecting the transportation industry and resulting in increased costs everywhere for consumers.
“These prices are insane, it’s incredible. We literally almost ran out of jet fuel at a few airports,” Tom Kloza, global head of energy analysis at OPIS, tells WHYY News.
Gas prices are hitting drivers in the gig economy, those who work for Uber, DoorDash or GrubHub, especially hard.
But higher gas prices impact the price of all goods and services, not to mention all Americans, as well. The manager of Big Daddy’s Pizza in Allston, Mass., sums it up for CBS News thus: “The price of gas is the price of gas for everybody.”
For everyday residents, including those in the Jackson, Mississippi, area, where gas is on the lower end nationally at $4.1 per gallon, prices continue to cause pain at the pump.
“I’ve had to limit my spending due to gas being so high,” local resident Hart Wilkins tells the Clarion Ledger. “I love going to the casino but I can no longer do so because gas is so high,”
1970s Style Rationing?
The rise in gas prices has been so swift that Steven F. Hayward, a resident scholar at the Institute of Governmental Studies at UC Berkeley, cautions in a recent New York Post editorial the skyrocketing prices “might not end until Biden attempts to impose price controls and rationing.”
Hayward predicts that as Democrats, including Senator Elizabeth Warren. D, Mass., blame corporations for price gouging and consider an “excess-profits tax,” rationing may soon follow.
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