Current Gasoline Prices Expected to Rise Further on Labor Day

The current gasoline prices continue to head higher as the Labor Day weekend approaches. Many say that the hike is sparked by a fire at the Richmond refinery a couple of weeks ago.

The most recent gasoline tracking report from Northern California’s AAA shows that every metro area in the region has two-digit increases of not less than 28 cents in its current gasoline price average versus the past month.

AAA NorCal’s spokeswoman, Ms. Cynthia Harris, said that the recent fire at Chevron’s Richmond refinery has caused a short term increase in the gas prices today throughout most of the Pacific Northwest and Nevada. The spokeswoman further added that the length of the fire’s impact remains to be seen.

California, the state following Hawaii with the highest average prices at the pump, is facing a 40 cent rise to $4.10 per gallon in their gas prices since July, reports the AAA. Still, as high as that appears, experts said that the rise is lower by 37 cents compared to last year’s average.

The oil price per barrel has increased from $78 in the latter parts of June to its recent level of $96 a barrel. Seasonal factors like the more expensive summer gas blends and higher demand, with more families going on vacation, contribute to the increase.

As prices at the pump reached the $4 level once more, analysts say that the upward movement may go on and drivers in the Bay Area may expect to spend about of $4.18 in the short term.

But, in spite of the increasing prices, experts anticipate a rise in the number of drivers hitting the road during the Labor Day weekend, with at least 33 million people driving not less than 50 miles, said the AAA. The rise is an increase of 2.9% compared to the figures last year and the highest Labor Day travel since recession started in 2007.

Those who are planning to drive are advised by the AAA to check fluids, hoses, tire pressure and belts to obtain the best possible mileage.  In addition, driving smoothly to prevent sudden starts and stops, together with combining trips and lightening the load on the vehicle can also help stretch gasoline mileage.

Even if California has seen cheaper gasoline prices this year compared to the past year, that is not the same case in other parts of the country. Nationally, the recent average of $3.72 a gallon spent by drivers at the pump marked the most expensive price ever for the period, reported the AAA. Analysts say that additional daily record highs will most likely following in the coming weeks.

But, analysts anticipate a price drop after the Labor Day.

By: Chris Termeer