published Tuesday, August 21st, 2012

Gas prices have never been higher this time of year

With prices at $3.09 at the Ballingers Gas station on Union Avenue in Memphis, motorists can afford to fill up and still leave a couple of bucks tip for Travis Wayne who provides full service at the little gas station, one of the few stations in Memphis that still provides full service.
With prices at $3.09 at the Ballingers Gas station on Union Avenue in Memphis, motorists can afford to fill up and still leave a couple of bucks tip for Travis Wayne who provides full service at the little gas station, one of the few stations in Memphis that still provides full service.
Photo by Associated Press /Chattanooga Times Free Press.
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You may pay more than ever for a late-summer drive.

U.S. drivers paid an average of $3.72 per gallon Monday. That's the highest price ever on this date, according to auto club AAA, a shade above the $3.717 average on Aug. 20, 2008. A year ago, the average was $3.578.

More daily records are likely over the next few weeks. The national average could increase to $3.75 per gallon by Labor Day, said Tom Kloza, chief oil analyst at Oil Price Information Service. By comparison, gas prices stayed below $3.70 in late August and early September in both 2008 and 2011.

Retail gasoline prices have gone up about 39 cents per gallon, or 12 percent, since hitting a low of $3.326 on July 2, according to AAA, OPIS and Wright Express. Kloza estimates that U.S. drivers are paying $149 million more each day for gas than in early July. That isn't what the sluggish economy needs, since any extra money that goes to fill gas tanks doesn't get spent at movie theaters or restaurants.

The price at the pump in the U.S. fell more than 60 cents per gallon during the spring when oil fell as the global economy slowed and turmoil in the Middle East seemed to subside.

But oil has risen to $96 per barrel from $78 in late June. Investors have been worried about disruption to oil supplies in the Middle East and North Sea. In the U.S., there were problems with refineries and pipelines in the West Coast and Midwest, including a fire in California. Seasonal factors also are at play: Summer blends of gas cost more and demand goes up as families go on vacation.

Analysts expect prices to drop after Labor Day, so at least drivers shouldn't have to worry about a return to the April high of $3.94 per gallon, barring a hurricane or other unforeseen event.

Still, commuters and vacationers are frustrated, said Michael Green, spokesman for AAA. It's tougher to budget a summer trip and discouraging to see a larger chunk of one's pay check going toward gas costs. As for a post-Labor Day drop, he said in an emailed statement that, "It would take a significant decline in the price of gasoline for most Americans to feel comfortable with what they pay at the pump."

Still, that frustration shouldn't stop people from hitting the road, said Brooke Ferencsik, director of communications at TripAdvisor. He said a majority of travelers recently surveyed by the travel advice site indicated they'll stick to fall travel plans even if they pay more for gas.

Whether pump prices impact the presidential election remains to be seen. But the Obama administration appears to be concerned. A senior administration official told The Associated Press on Friday that the U.S. is considering a release of oil from the country's strategic reserves. It will monitor gas prices.

Across the U.S., prices range from a low of $3.43 per gallon in South Carolina to $4.32 in Hawaii. Arizona, Mississippi and New Mexico also have average prices below $3.50 per gallon, while California and Illinois are up above the $4 mark.

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