Gas Prices Soar Ahead of Labor Day Weekend, Just a Cent Shy of Record High Set 11 Years Ago High gas prices are being driven by a number of factors, including OPEC's decision to cut production and extreme heat that has disrupted refinery operations.
Key Takeaways
- While gas prices are still below the June 2022 peak of $5.02 a gallon, they are high enough to be a burden on consumers and weigh on consumer confidence.
- With hurricane season on the horizon, prices could continue to rise.
Opinions expressed by BIZ Experiences contributors are their own.
If you're planning on a road trip this Labor Day weekend, be prepared for a sticker shock at the pump.
The national average for regular gas is $3.83 a gallon as of Thursday—just one cent shy of the record-high set in 2012 during the week leading up to Labor Day, per a CNN analysis of federal data. Currently, 11 states are averaging $4 a gallon or more, according to AAA.
While gas prices typically tend to decrease towards the end of summer, extreme heat, an active hurricane season, and limited product supply have caused prices to steadily increase. OPEC, the organization of oil-producing countries, extended a cutback on oil production earlier this month to boost the cost of crude oil and balance budgets, ultimately causing a restriction of overall supply. Extreme heat has also disrupted refinery operations, as the high temperatures cause refineries to literally "break down," Tom Kloza, president of the Oil Price Information Service, told CNN in August.
"It's like running an engine at very hot temperatures for a long time," he added.
Related: 'Check On Your People, Things Aren't Good': Devastating Storm Creates Gas Shortage in South Florida
While prices are high, they're still below the June 2022 peak of $5.02 a gallon, with some areas around the country charging up to $8 a gallon.
"Because of the erratic nature of hurricane season and this extraordinarily warm weather we've had, prices are going to be erratic, too, and likely will remain so through mid-September," AAA spokesperson, John Treanor, told the San Francisco Chronicle. "For the next couple of weeks, we're going to see prices maybe not significantly increase, but not significantly decrease, either."
Still, the cost of gas can serve as an economic indicator for many Americans. In August, the Conference Board's Consumer Confidence Index (a monthly report on consumer attitude towards the economy) dropped to 106.1 in August — down from 114.0 in July. The organization pointed to "gasoline in particular" as one of the main drivers for the drop.
"The average consumer isn't thinking about it in inflation-adjusted terms," Andy Lipow, president of consulting firm Lipow Oil Associates, told CNN. "Because the price is shown at every corner, people see the price and think about what it used to be."
