Average US gas price dips below $5 a gallon

Sunday’s average price was $4.98 a gallon, down from $4.99 on Saturday’s reading. The average gas price had been $5 or more for the previous seven days, the first time record prices had crossed that mark. It peaked at $5.02 a gallon on Tuesday and has fallen by a fraction of a penny every day since then.

But drivers shouldn’t get too excited. Beyond the fact that the drop from $5.02 a gallon to $4.98 only saves 80 cents on a full 20 gallon, it’s very likely just a temporary dip. gasoline prices.

With many schools set to close and the summer travel season about to hit full swing, demand for gasoline – and prices – should soon start to climb again. The average gas price could approach $6 later this summer given current market fundamentals, said Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA.

“Everything goes from June 20 to Labor Day,” Kloza said recently of the demand for gasoline as people hit the road for long-awaited getaways. “Come hell or high gas prices, people are going to take vacations.”

And it’s not like $5-a-gallon gas is in short supply now.

Nearly a third of the 130,000 gas stations in the AAA survey sell regular gasoline for more than $5, according to OPIS data. There are 17 states, plus Washington DC, where the average price is $5 or more, with New Jersey only slightly behind with an average of $4,999. The most expensive state remains California, where gasoline costs an average of $6.40 per gallon.

Gasoline prices fell much more slowly than they rose before Tuesday’s record high, reaffirming the old adage that gasoline prices rise like a rocket and fall like a feather. For the two months leading up to Tuesday’s record, the average AAA price rose 58 times in 60 days, adding 94 cents to the national average price. That’s a steady rise of nearly 2 cents per day, compared to less than a penny per day that the price has fallen since Tuesday.

The best cure for high gas prices might be -- high gas prices
Gasoline and oil prices weigh heavily on many consumers’ budgets. The typical U.S. household buys about 90 gallons of gasoline per month, Kloza said, so with prices averaging $1.91 a gallon last year, the hike is costing the typical U.S. household an additional $172 per month or more.
There are warning signs that high prices could force consumers to cut back on spending at other retailers, raising fears that this could be a factor causing the economy to slide into recession.

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