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Runaway Gas Prices Keep on Spiking

Record-High Prices In Store for Memorial Day Travelers

By Joe Benton
ConsumerAffairs.com

May 22, 2007

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Gasoline prices were up seven cents over the weekend and 13 cents in the last two weeks. The new record surpasses the 1981 inflation-adjusted all-time price record that stood for 26 years.

Prices are above $3 a gallon in every state except New Hampshire, New Jersey and South Carolina and higher prices are certain to be on the way as Americans hit the road for the Memorial Day holiday and the start of the summer driving season.

The high prices are bad news for the 38.3 million drivers expected to travel over the upcoming holiday weekend and there appears to be no relief in the foreseeable future.

The AAA automobile club is warning that more record prices could be on the way. AAA is forecasting that nationwide average prices will approach $3.25 a gallon over the next 60 days.

While gasoline had already been in record territory in current dollars, Trilby Lundberg, publisher of the Lundberg Survey, said this is the first time that her survey topped her 1981 record high when adjusted for inflation.

The price of $1.35 in 1981 works out to $3.15 in current dollars, she said. The Iran-Iraq war, which started the year before had cut oil supplies to the global market causing the 1981 spike in prices.

Before this recent run of record-high gas prices, the highest price ever recorded in current dollars was $3.06 in the AAA survey which was set September 4 and 5, 2005 following Hurricane Katrina. That storm disrupted refinery operations and pipelines and caused a temporary spike, sending prices above the $3 mark for eight days.

Prices also spiked above $3 a gallon in August 2006 after Israel invaded Lebanon and oil futures jumped higher.

This year the average gas price climbed above $3 a gallon on May 4 and has been on the rise ever since.

California still has the highest average gasoline price in the country with a gallon of self-serve unleaded costing $3.46. New Jersey enjoys cheapest average gas price $2.94 a gallon.

Crude oil prices have fallen over the last few weeks and oil supplies are high in the United States but problems at several refineries have reduced gasoline output ahead of the summer driving season.

The refinery problems include fires, power outages, and longer-than-usual maintenance periods.

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