The average price for a gallon of unleaded gasoline rose above $5 nationally for the first time due to increased demand from the economy reopening from the pandemic and depleted oil supplies stemming in part from the war in Ukraine.
Prices look set to continue rising into the summer months, analysts said.
According to AAA, the average national price reached $5.004 on Saturday. That’s up from about $3.07 a year ago and a record price not adjusted for inflation. At the end of the week, prices had already averaged $5 or more in about 20 states, with the highest prices on the West Coast.
“By my calculations, the typical household is spending about $160 more on gas a month than a year ago,” said Mark Zandi, chief economist at Moody’s Analytics. “That’s a big bite.”
Gasoline prices normally peak in mid-May, but this year they have continued to rise and the average price is about 65 cents higher than a month ago. Due to short supplies this year, analysts are forecasting that prices may not top out until mid-July, when summer driving season traditionally peaks.
“I don’t think we’re far away” from the highest prices, said Patrick DeHaan, head of petroleum analysis at GasBuddy. “I don’t think it would eclipse $5.50. I would say $5.25 is the top, but again, the market is unhinged.”
However, if there are any serious refinery outages this summer, or disruptions from hurricanes, gasoline prices could spike, he added.
Gasoline is in shorter supply than normal because the U.S. has lost about 1 million barrels a day of refining capacity, since before the pandemic. At the same time, sanctions on Russian energy has sent oil prices sharply higher and created tight supplies of both oil and fuel globally.
Analysts say while consumers are feeling pain at the pump, the price of fueling a car with gasoline is not as big a part of a household’s spending as it had been in the past. That is in part due to more efficient vehicles.
According to a CNBC analysis, drivers were spending an estimated average 20 cents per mile on gasoline as of June this year, even with the steep price increases. In 1980, that same mile would have cost 30 cents in today’s dollars.
–CNBC’s Nicholas Wells contributed to this report