The US average price per gallon of gas increased 2 ½ cents this week to $3.09. That is up over 5 cents from last month and 91 cents higher than last year, according to the price tracking app GasBuddy.
Given the current environment of pent up demand to travel, combined with the popular road trip July 4th Holiday, it seems likely this trend will continue. The economy is heating up at a feverish pace after 15 months of stalling due to the pandemic. This rapid recovery has gas prices along with a long list of other commodities and durable goods on the rise. Anyone who has taken a trip the supermarket or gas station this week can tell you they have had to dig deeper for the same basket of food or full tank of gas than just one month ago.
To put it into perspective, we should all expect to pay an additional $600 in gasoline this year as compared to prior years. Is this the new normal, or will prices settle down? I’m of the opinion that we will see these inflated prices for some time to come. We have not seen gas prices this high since 2014. Since we’re putting things into perspective, I guess 2014 levels are better than 2012 levels when gas was $3.30, although it seems likely we could get there over the summer. As mentioned, gasoline is just one element among a long list of items such as building materials, meat, poultry and everyday household items that have seen a sharp price increase.
The Federal Reserve stated “This is all part of an inflationary mix that should subside.” I don’t know about you, but I’m not holding my breath until prices “subside.” We all need to be prepared that higher prices across the board are part of the post pandemic economy and are here to stay.
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