Americans are shelling out a lot more for gasoline these days.
Americans got used to falling gasoline prices and filling up cheaply from 2014 to 2016, but they are paying dearly at the pump now.
Sales at gasoline stations were up almost 12% in April compared to one year ago, reflecting a runup in oil prices that began last summer and accelerated in 2018. The cost of a barrel of oil has climbed above $70 from $45, and it could head higher still with the summer driving season straight ahead.
Put another way, Americans shelled out an extra $4.4 billion for gasoline last month than they did in April 2017, according the government’s latest report on retail sales.
That’s $4.4 billion Americans can’t spend on a new TV, a kitchen appliance, new clothes or eating out.
Rising gas prices are also swallowing up some or even most of the extra cash Americans have found in their paychecks after the recent tax cuts championed by President Trump.
A year earlier, a gallon of gas cost 50 cents less. And a little more than two years ago gas prices fell below $2 nationwide for the first time since 2008.
Don’t expect any relief in the near future. Gas prices are more likely to top $3 a gallon before they fall back toward the $2.50 mark. U.S. tensions with Iran, unrest in the Middle East and an effort by OPEC to maintain current price levels have offset rising U.S. oil production.
In some states gas prices have already breached $3 a gallon or even topped $3.50. California has the highest gas prices in the country, with a gallon averaging $3.68. Hawaii is not far behind.
The cost of fueling up is cheapest along the Gulf Coast and other parts of the South. Gas costs an average of $2.56 a gallon in Mississippi, $2.58 in Louisiana and $2.65 in Texas, Gasbuddy estimates.