COLUMBUS – Although the price of gasoline has dropped by about 25 cents a gallon since Memorial Day, central Ohio drivers are still shelling out that much more than they were last year and the extra cost of fill-ups is beginning to impact the national economy.
According to the auto club AAA, gasoline expenses are accounting, on average, for seven percent of Americans’ 2018 annual income, a one and half percent increase since summer of 2017, a hike that has been driven by higher gas prices.
The Labor Department reported last week that higher gas prices drove the consumer price index up 2.8 percent in May, compared with a year earlier, putting inflation on its fastest annual pace since February 2012.
The cost of fuel may be on the minds of motorists, but the AAA says the current price of $2.66 a gallon in Columbus – while about 25 percent higher than a year ago — is a long way from the level where it would cause drivers to change their habits or plans for summer vacations.
“Motorists can expect to spend at least $250 more on gas this season, but that won’t stop them from traveling,” said AAA spokesperson Jeanette Casselano. “The higher gas prices may just encourage travelers to shorten their driving distance while others may pinch pennies by eating out less or finding more free family-fun activities while on vacation.”
A AAA survey conducted earlier this year indicated only one third of Americans would change their travel plans if gas prices hit $3, while 47 percent say prices would have to reach $3.50 a gallon.
Unfortunately, drivers may be faced with that scenario as soon as this month, Casselano says.
“If demand continues to strengthen and inventories decrease in the weeks ahead, motorists can expect gas prices do a reversal and start to increase again. AAA expects the national gas price average to range between $2.85 and $3.05 through Labor Day, likely seeing the summer’s highest prices in June,” she said.
After increasing to $72 a barrel last month, the benchmark price of U.S. crude oil fell more than a dollar on Friday to go below $64 a barrel. The retail price of gasoline followed the price of oil, climbing to a peak of nearly $3 a gallon before the Memorial Day holiday, its highest level for that time of year since 2014.
The average price in Ohio Monday morning was $2.70, according to a daily survey from the AAA, the Oil Price Information Service and WEX, Inc. That 10-cent decline from the week before was the largest weekly decline in the nation.
The nationwide average price was 90 cents higher than a year ago.