US fuel prices reach new highs ahead of Memorial Day — Analysis
Gasoline sets a new all-time high heading into the holiday weekend that marks the start of America’s summer driving season
US retail gasoline prices have climbed to fresh all-time highs just in time for the traditional start of America’s summer driving season, the Memorial Day holiday weekend.
According to AAA Motor Club data, regular-grade gasoline prices rose to $4.60 per g on Thursday. They remained at that price on Friday. In the last year, US benchmark fuel prices have risen 51%. This is more than 90% increase since January 2021 when President Joe Biden assumed office.
The price squeeze is even harder for motorists in high-cost areas. California was the latest state to record gasoline at $6.08 per gallons on Friday. Washington and Hawaii set state records at $5.43 per gallon each and $5.22 respectively.
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Even more expensive diesel is at $5.53 per gallons in America on Friday. That’s less than 14 of a cent below last week’s all-time record $5.57. Surging diesel costs will ripple through the US economy, economists have warned, because the fuel is used for the trucks and trains that deliver most consumer goods and for the farm equipment that produces America’s food.
“People should be very concerned,”According to the Los Angeles Times, veteran energy economist Philip Verleger Jr. Verleger Jr., a veteran energy economist, predicted that diesel prices could reach $10 per gallon this summer. “unimaginably high levels absent a significant economic slowdown.”
Biden has largely blamed Russia’s military offensive in Ukraine for driving up fuel prices, while Republican critics have pointed to his administration’s actions, including blocking a major pipeline project, delaying drilling permits and suspending leasing of exploration prospects on federal lands. To punish Moscow for the Ukraine conflict, Biden banned US oil imports from Russia in March.
As Americans enjoy more time off school during summer, fuel demand tends to spike in the summer. This is usually the Memorial Day weekend. AAA estimates that 35 million Americans will take to the roads this weekend for vacations, with more than 3,000,000 flying by air.
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Inflation is at an all-time high of 40 years and US gasoline demand has been slowing in the US. GasBuddy data shows that Thursday was a critical fill-up day just before Thanksgiving. It rose 4.3% in comparison to a week prior. Patrick De Haan of GasBuddy’s petroleum analysis, called the gain “pretty lackluster”This is an indicator that “demand destruction is hitting the Memorial Day weekend.”De Haan forecasted a seasonal increase between 7-10%.