According to the recent statistics released by AAA, gas prices at the pump in the U.S. have risen non-stop for over 30 days in a row. The average price for regular unleaded gas has gone up over 13% to $3.75 per gallon.
In light of the fact that American consumers are taking home smaller paychecks thanks to the payroll tax cuts expired and that most people are already looking at huge bills to keep their homes warm, the fuel price hike could not come at a worse time. Plus, many government workers are worried about possible furloughs and potential budget cuts will deliver an even deeper blow to the already struggling economy.
What’s the cause of the price jump at the pumps? Actually it is a combination of increasing crude oil prices, refinery closings and cuts in production. Many refineries have to deal with unanticipated maintenance causing the drop in production and sometimes even temporary closings. All this is happening with the consumer market poised at the edge of spring and summer vacation times. This makes for things being tight everywhere say market analysts and industry experts.
According to recent information release by the Energy Information Administration, the price of crude oil has gone up about 10% just in the past two months. What many average consumers don’t realize is that 2/3 of the price of a gallon of gas comes from the price of crude oil. However there are some economic factors that affect the situation as well. The U.S. housing market is experiencing a mild resurgence, employment numbers are rising a bit and consumer spending will most likely expand a bit in the near future. All of this drives up the demand for oil causing the price increase.
This past week the average retail price of gas posted the largest one-day increase in nearly two years when it jumped four centers per gallon according to AAA reports. This means that in the average price per gallon has risen about 13 cents in the past week. Industry representatives say that this was the highest record for the beginning of February. Market analysts believe the national average per gallon price will climb even higher in the next few days.
Industry experts believe that if the issues with refinery production slow down and closings continue then the cost will continue to rise. The biggest question on the mind of the average consumer is and always has been when the price increase stop?