Hitting the Road? Expect Higher Gas Prices Over Memorial Day
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Memorial Day weekend promises to be a big one for road trips, and that means gas prices are going to jump.
As of May 20, a gallon of regular gas costs $3.58 on average in the U.S., according to the U.S. Energy Information Administration (EIA). Through the summer, gas prices are expected to average $3.70 per gallon nationally.
Summer driving season kicks off
Memorial Day marks the unofficial start of the summer travel season in the U.S. Factoring in all forms of transportation, AAA predicts 43.8 million people will travel this holiday weekend, making it the busiest Memorial Day since 2005, according to its travel forecast released May 13.
Most of those travelers will go by car. AAA expects a record-high 38.4 million people will roadtrip 50 miles or more over the holiday weekend. That would make it the biggest crowd of roadtrippers since 2000, when AAA started tracking.
A surge in demand for fuel will play a role in rising prices ahead of the weekend.
Expect prices to look like last year
There are several reasons why gas prices go up, but a big one at this time of year is seasonal demand. In a normal year, drivers can expect to see a summer spike in prices just because there are more people on the road.
It’s worth noting that recent memory puts a different spin on “spike.” Just two years ago, inflation and super-high oil prices (because of Russia’s invasion of Ukraine) contributed to sky-high gas prices. On Memorial Day in 2022, a gallon of regular gas cost $4.62 on average, according to a review of EIA data. Just two weeks later, the national average hit a record $5.01 per gallon.
At that time, the consumer price index for all goods and services showed an annual inflation rate of 9%. But prices for all types of gasoline had risen 60%.
Gas prices haven’t fallen all the way back to levels seen before 2022, but they’ve made progress in that direction. They also seem to have resumed a more predictable annual cycle.
The national average price on Memorial Day in 2023 was $3.57 — more than $1 per gallon less than the previous year. Drivers out and about over Memorial Day this year can expect to see similar prices to last year, AAA says in its holiday weekend travel forecast.
That national average masks a huge range in state-by-state prices, from just a shade over $3 in Mississippi to more than $5 in California.
There could be bumps in the road ahead
Besides consumer demand for gas, prices depend on a complex set of variables, including:
The cost of raw crude oil.
The cost to refine crude oil into gasoline.
Taxes, which vary state to state.
That makes gas prices volatile all the time. But there are factors at play in 2024 that could undermine current expectations for summer gas prices.
First, ongoing wars in the Middle East and Ukraine could disrupt the oil market and lead to higher oil prices.
Additionally, higher standards for summer fuel blends, as well as closures that reduced refinery capacity, have led to higher prices during the past few years. The EIA thinks that could be a factor again this summer, according to a May 14 report.
If production reached a five-year low, as simulated in the EIA report, gas prices could be 10 cents higher this summer than originally predicted.
(Photo by Mark Wilson/Getty Images)
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