Inflation, seasonal trends suggest increase in crude oil cost
No, the complaints about gas prices aren’t going away anytime soon. Gas prices are likely to get more costly, predicts AAA.
The average cost of a gallon of gasoline in Santa Barbara County was just under $4.07 Tuesday. A month ago, it was $3.92.
California’s average sat just under the county’s, at $4.05 per gallon Tuesday. The national average, by contrast, was $2.91.
While Santa Barbara County seemed to reach over $4 overnight, the national average only increased by three cents in April.
“While April saw minimal fluctuation, May is likely to see much larger increases alongside demand spikes, especially closer to Memorial Day weekend,” Jeanette McGee, AAA spokesperson, said in a news release.
AAA even predicts some pumps — particularly those close to beaches or mountains — may run low or run out of fuel when tourists drive into town.
“With road trips expected to be popular this summer, some summer travel destinations, like beaches or mountains, may see some pumps affected. It is important to understand this is not a market-wide impact,” she said. “Gas can be found at other stations within a market.
“The U.S. is not looking at a gas supply shortage; there is ample gasoline supply across the country. It is just a matter of more frequent deliveries to stations to meet demand.”
Federal regulations require refineries to produce more expensive blends of gasoline in the summer months, further driving up costs. Springtime is also a popular season for refineries to shut down and perform maintenance.
Experts have a variety of theories why gas prices have increased, and the reason is likely a combination of factors. But it’s important to note: gas prices are not the highest they’ve been in years, as some people claim.
The last time gas prices were this high nationally was in May 2019, so the current situation isn’t close to breaking any all-time highs.
Perhaps, the more concerning numbers are in the U.S. Bureau of Labor Statistics’s Consumer Price Index. It tracks the price of goods, giving an idea of inflation.
March 2021’s index showed a .6% increase (seasonally adjusted) in the cost of goods — the largest increase over a single month since August 2012 (which also had a .6% increase).
The report showed a 2.6% increase over the 12 months prior, with groceries increasing 3.3%.
Companies have taken notice and have recently warned consumers about an increase in price.
CEO of The Coca-Cola Company James Quincey told CNBC that the company plans to raise its prices, but he did not specify which products.
General Mills, manufacturer of hundreds of pantry items, announced in March that it would raise prices after the demand for groceries grew during the pandemic.
Procter & Gamble will raise the price of “baby care, feminine care and adult incontinence product categories,” it said in a statement. Kimberly-Clark is also raising its personal care products.
The lower value of a dollar may mean Californians won’t see gas prices below $3 — unless, of course, another global pandemic drastically drives down demand once again.