Gasoline prices soared 21% in one month, pushing inflation to the highest level in nearly three years
Inflation has risen to the highest level in about three years due to soaring gasoline prices, reaching an annual rate of about 3.5%.
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- Gas prices are stable, but could rise again due to geopolitical developments or a decline in crude oil inventories.
- Factors such as state taxes, distance from supply, and retail competition create regional price differences.
- Drivers can save money by using gas pricing apps, participating in fuel reward programs, or paying with cash.
The national average gas price has held steady at about $4.50 a gallon, but one analyst predicts drivers could be exposed to further price increases as many Americans prepare to hit the road for Memorial Day weekend.
“The national average price of gasoline remained low for much of last week after surging earlier in the week as oil prices softened on hopes that diplomatic progress between the US and Iran would ease supply concerns,” Patrick de Haan, head of oil analysis at GasBuddy, said in a blog post. “However, that optimism faded after President Trump’s meeting with China’s Xi Jinping failed to yield a solution to the Iran issue, while fresh warnings against Iran helped push oil prices back up.”
De Haan added: “Global oil inventories continue to trend toward historically challenging levels, and markets remain highly sensitive to geopolitical developments and potential supply disruptions. As a result, gasoline and diesel prices are likely to remain volatile, and as Memorial Day approaches, sustained increases in oil prices could begin to push retail fuel prices up again in the coming weeks.”
The prediction comes as gas prices have soared from an average of $2.98 nationwide on Feb. 28, when the U.S. and Israel launched military strikes against Iran, to a current average of $4.51, according to the AAA Automobile Club.
What causes the variation in gas prices across states?
According to the U.S. Energy Information Administration, regional differences in gas prices can be explained by several factors.
The agency cites the following reasons for regional differences in gas prices.
- Differences between state and local gas taxes.
- Distance from power source.
- Supply disruption.
- Retail Competition and Operating Costs.
- environmental program.
“The more gasoline has to be transported to the point of sale, the higher the transportation costs, so the retail price of gasoline tends to be higher,” the agency said. “Slowing or stopping gasoline production can increase bidding on available gasoline supplies. Gas station prices are often highest in locations with fewer gas stations.”
Which states have the highest gas prices?
In addition to the 18-cent federal gas tax that all drivers pay at the pump, each state adds its own local gas tax.
According to AAA, the top five states with the highest gas prices, including federal taxes, are listed below, along with the current average gas prices as of May 18th and one week earlier, May 11th.
1. California
- Average gas price on May 18: $6.15
- Average gas price on May 11: $6.15
2. Washington
- Average gas price on May 18: $5.77
- Average gas price on May 11th: $5.76
3. Hawaii
- Average gas price on May 18: $5.63
- Average gas price on May 11th: $5.65
4. Oregon
- Average gas price on May 18: $5.33
- Average gas price on May 11th: $5.32
5. Alaska
- Average gas price on May 18: $5.28
- Average gas price on May 11th: $5.26
How can I save money on gas?
Here are five tips on how to save on gas before you leave for Memorial Day weekend.
1. Skip premium gas
PennyHoarder.com said, “Most cars don’t need or benefit from high-octane gasoline, so buying a luxury car just adds to your expenses.”
2. Find the cheapest gas near you using our gas price app
Drivers can use apps like GasBuddy, Waze, and AAA to compare prices at nearby stations. Maps apps like Apple Maps and Google Maps also now show prices at many stations when drivers use the “Nearby Gas” feature.
3. Save money with grocery store fuel rewards programs
Many grocery stores offer rewards programs that reward shoppers with points that can be used for discounts at nearby gas stations. Sign up at your local grocery store and make sure you link your purchases to the same account each time.
4. Use credit card points for fuel discounts
Many credit cards give you points on purchases that you can use later on things like travel. Many of these benefits can also be used for gas discounts.
5. If the price at the gas station is low, pay in cash.
Some gas stations offer discounted prices to customers who pay with cash instead of credit card. In some cases, paying cash can save you more than 10 cents per gallon.
“It’s a way to avoid card processing fees,” Penny Hoarder said of gas stations offering cash discounts.
