"Nationally, gasoline averages $3.70 a gallon — up 30 cents since mid-July and is now higher than year-ago levels in 39 states. Prices are likely to continue climbing through August, with little relief until afterLabor Day," USA Today reports.
Gas jumped 9 percent this month, pushing the national average to $3.67 a gallon, thereby beating 2011's $3.51 a gallon record. And it doesn't look like it's going to let up. In fact, even after demand dies down with the end of summer, 2012 will still most likely be the most expensive year on record, according to Brian Milne of energy tracker Telvent DTN.
"The run-up comes at a time when prices typically have peaked for the year, and just weeks after decreasing demand and slowing worldwide economic growth pushed prices well off 2012 highs. The trend had prompted some industry experts to forecast $3 a gallon gasoline by autumn. Now, Milne expects a top at about $3.90 before dropping in September [emphasis added]," USA Today reports.
Of course, drivers in the Midwest are already paying that much and the cost in California has jumped considerably after a fire broke out at a Northern California Chevron refinery last week.
"The $4 threshold is when you see sticker shock and marked changes in consumer behavior and spending patterns," says Scott Anderson, chief economist at Bank of the West, who warns rising gas prices will stymie consumer spending.
"When prices come down, that really revives disposable income. The longer we see these highs, the more impact you'll see on consumer spending," he adds.
However, AAA spokesman Michael Green is confident people will travel despite the rising costs.