Americans hitting the road on Memorial Day weekend were greeted by record-high gas prices as the average cost of a gallon of fuel hit $4.62 nationwide.
Motorists in California were feeling the strongest pinch Monday, with some gas stations in parts of Los Angeles, the San Francisco Bay area and the Yosemite region charging in excess of $7.25 per gallon — more than the federal minimum wage.
On average, gas in the Golden State costs $6.15 a gallon, more than in any other in the nation, according to AAA. Californians are saddled with higher prices due to taxes and surcharges that are added onto the baseline cost of fuel.
The nationwide average, meanwhile, represents a 40% increase from the start of the year. It is also well above last year’s $3.04 per gallon level.
Analysts predict that more states will cross the $5 per gallon average by the Fourth of July holiday as demand is expected to increase while supply remains tight.
“I don’t think as many people are going to hit the road, and if they do, I think a good portion are going to be staying close to home,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CNBC.
“They’re definitely should be a noticeable bump, but my impression is people are not driving as far. The concern is high prices that are keeping people a little closer.”
De Haan added: “There’s also work-from-home that changed things. There’s a strong subset of people that can basically work from the road all the time.”
Global oil prices also continue to tick upwards. Brent crude, the international benchmark, surpassed $120 per barrel, reaching a two-month high.
West Texas Intermediate, the US benchmark, reached more than $116 a barrel on Monday.
The surge in demand following the lifting of coronavirus-related lockdown measures as well as the ongoing Russian invasion of Ukraine have squeezed oil markets.
The European Union is meeting Monday and Tuesday to discuss a sixth package of sanctions against Russia over its invasion of Ukraine.
EU countries failed to agree on a Russian oil import ban despite last-minute haggling before the summit got under way in Brussels on Monday.
But leaders of the 27 EU countries will agree in principle to an oil embargo, a draft of their summit conclusions showed, while leaving the practical details and hard decisions until later.
With Post wires