Americans are speeding towards a new record on average gas prices and they could bust through the July 2008 highs in a matter of days, gas cost experts said on Monday as Russia’s war continued to rage in Ukraine and roil commodity prices in America.
Over the weekend, the national average for a gallon of gas surpassed the $4 mark, inching closer to the record, which AAA said was set on July 17, 2008 at a cost of $4.11/gallon.
On Monday, national average rested — for now — at $4.06, a nickel from AAA’s record.
“We’re likely going to see a new record set this week for the national average,” AAA spokesman Devin Gladden told MarketWatch. The same goes for new records in various states, he said.
Better get ready quick, according to researchers at GasBuddy, a tech company analyzing gas station prices. The new gas price record could be here by Tuesday, if not sooner, the company said.
GasBuddy puts the national average record at $4.10, and as of late morning Monday, the average price stood at $4.08.
“There are few words to describe the unprecedented rise in gasoline prices over the last week, with massive spikes coast to coast in both gasoline and diesel prices, as oil prices jump to their highest since 2008,” Patrick De Haan, GasBuddy’s head of petroleum analysis, said in a statement.
“Forget the $4 per gallon mark, the nation will soon set new all-time record highs and we could push closer to a national average of $4.50/gal,” he added.
On Monday morning, De Haan said the new record was coming quick.
Of course, these are average prices, so the $4/gallon prices are relative bargain in some places.
In California, the average price was $5.34 on Monday, AAA said. People in the Golden State could be hurtling towards “$5.50 per gallon with more stations charging $6 and beyond,” De Haan said.
When Russia launched its assault on Russia roughly two weeks ago, U.S. President Joe Biden countered with sanctions against Russia — with a warning to American consumers about the financial pain laying ahead.
“Defending freedom will have costs for us as well, here at home. We need to be honest about that,” Biden said.
Since then, oil buyers have been turning away from Russian crude and now America and European countries are considering a formal embargo on Russian oil imports. The three major stock benchmarks were down Monday afternoon as investors weighed the potential consequences.
How high gas prices go and how long the record streak runs on crude oil prices, which are mixed in with geopolitical questions surrounding Russia and Ukraine, Gladden said.
Also remember that spring and summer are approaching, two seasons when Americans traditionally get on the road to see friends and family. Bouncing back from 2020 pandemic restrictions and worries, Americans took 6.1 billion trips during the 2021 Memorial Day Weekend. That’s was a 13% increase from 2020, but still off 2019’s 6.9 billion trips, according to the Bureau of Transportation Statistics.
Four dollars now and $4 in 2008 are not the same thing. AAA’s July 2008 record of $4.11/gallon would be $5.25 in January 2022 dollars, according to a Bureau of Labor Statistics inflation calculator.
Even though gas doesn’t cost $5 on its face in many places for now, AAA’s past consumer sentiment surveys show different numbers have different psychological impacts.
“Once you cross the $4 threshold, consumers start considering all sorts of options,” Gladden said — by the $5 mark, drivers increasingly consider other options.
That includes combining trips, carpooling, reducing idling and making sure a car is well-maintained and has good air pressure to maximize fuel efficiency, Gladden said.
“The message to consumers is we should buckle up because there’s going to be more pain at the pump as prices increase,” he said.