Consumers have been spending more on gasoline than they have in nearly three decades.
With pump prices at their highest level on record for this time of year, the stage is set for an even greater climb in gasoline prices and expenditures than in 2012. Retail gasoline prices have surged 17 cents in a week to top $3.50 a gallon on average, posting the highest prices on record for the beginning of February.
According to AAA, the national average price of regular gasoline is $3.52 a gallon, 4 cents higher than the average price a year ago. The average price was $3.35 a gallon a week ago and $3.30 a gallon a month ago.
Meanwhile, the U.S. Energy Information Administration reported Monday that gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4 percent of income before taxes. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Gasoline prices averaged $3.63 a gallon in 2012, according to EIA.
Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures, according to the EIA.
The spring rally in gasoline prices typically starts in late February or early March, so this year’s gains have come earlier than is usually the norm.
Analysts said the uncharacteristically early price rise is due to several factors: some refineries closing permanently or shutting down for maintenance, climbing crude oil prices, and a shortage of supply in California, requiring fuel to be diverted from other areas of the country to make up for reduced inventories.
In California, which often has the highest-priced gasoline in the continental U.S., mid and premium priced grades are already over $4 a gallon. Meanwhile, the state-wide average price of regular gasoline has jumped over 30 cents, or 10 percent, from a month ago to $3.91 a gallon on Monday, according to AAA. California gas prices are up 24 cents – or 6 percent higher – than they were a year ago.
Diesel fuel is also near the $4 a gallon mark, with the national average price of diesel at $3.98 a gallon on Monday, according to AAA. Diesel prices are about 10 cents higher than a year ago.
Meanwhile, consumers who use heating oil in their homes have seen sharp increases in those fuel prices and are also paying more than they did a year ago. According to the New York State Energy Research & Development Authority, the statewide average price of residential heating oil was $4.14 a gallon for the week ending January 28, up about 3 percent from a year ago.