Gas prices are up 80 cents over this time last year, according to an April 11 Lundberg Survey of 5,000 gas stations. Over the last three weeks alone, pump prices have risen 3.8%. On average across the country, a gallon of regular is now $2.85, and premium is $3.09.
While the price of gas is up, it's not clear whether that's due entirely to rising crude, which is now $85.33 a barrel. In the five months ending in late March, oil traded between $70 and $80. Since then it has been going up steadily.
But pump prices aren't always a direct result of crude oil price activity. Refiners aren't always able to pass along the price of oil in their refined products. Lately, refiners have gone through an extended period of low margins because they haven't been able to fully pass high crude oil prices to consumers primarily because the slow economy has hurt demand.
However, demand may now be rising as the economy recovers, and refiners may see better profits. The irony is that a recovery often drives gasoline prices higher, and higher gasoline prices can undermine a recovery. The increasing price of energy affects spending in a wide range of sectors, from discretionary consumer income to airline budgets for jet fuel.
It's hard to say where the "tipping point" is for gasoline demand. At some point, if the price of regular gas moves well above $3, drivers are likely to be more cautious about how many miles they drive. But for now, rising gasoline prices likely result from rising demand as consumers hit the road again.
Premium Gas Tops $3, and Regular Isn't Far Behind