As travelers fill up tanks and and head out for beaches, mountains, friends and relatives, the intense demand will challenge a national supply of gasoline production that has been flagging, said Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks fuel prices nationally.
Fire and hurricane damage over the past several years have sidelined several refineries, he said.
And while shortages of gas are unlikely, just one ill-targeted storm in the Gulf of Mexico this summer could change that, he said.
“There’s no breathing room,” he said. “It is not going to be good.”
The balance is even more precarious for diesel, which commonly costs more than $5 a gallon already, De Haan said.
When refinery production is healthy, the primary factor in pump prices is the global price of oil. And before the pandemic, prices were propped up by the decision of Saudi Arabia and Russia — two of the world’s largest producers — to hold back production.
But prices plummeted when the pandemic hit, demand for fuel fell and many producers cut back.
Economies rebounded last year and drivers again took to the roads, but oil production did not ramp up fast enough to meet demand. Prices rose through the fall and winter, and the Russian invasion of Ukraine further roiled world markets, sending prices higher still.
A month ago, the average price of gas was $3.74 a gallon. A year ago, gas was $2.94 a gallon. And in May 2020, when the early months of the pandemic were keeping many drivers off the road completely, metro Atlanta gas was a mere $1.66 a gallon, according to GasBuddy.
Taking inflation into account — that is, using consumer buying power as the measure — prices at the pump this Memorial Day holiday are only eclipsed by the start of summer in 2008. On that Memorial Day, a gallon of gas averaged $3.91, which translates to $5.22 in current dollars.
Gas prices are probably about at their peak, De Haan said — except for in Georgia.
Drivers in the state are paying about 25 cents per gallon less than the national average, and that gap seems likely to shrink or disappear soon. That’s because Georgia drivers have been getting a discount they might soon lose.
When gas prices were spiking in March, Gov. Brian Kemp ordered temporary suspension of the state’s 29.1 cent-a-gallon gas tax. If no action is taken, the tax would be reinstated June 1.
A spokeswoman for Kemp said Tuesday he hasn’t made a decision yet on whether to extend the suspension.
If the tax is reinstated, retailers can decide how much of that bump to pass along to motorists.
In the meantime, nearly 1.2 million Georgians are set to travel this week, said Debbie Haas, Vice President of Travel for AAA — The Auto Club Group.
“People are more comfortable traveling now than any other time in the past two years,” she said.
Travel is mostly about the roads, she said: Less than 10% of those travelers will journeying by air, bus or train.
And the price of gas matters to all but a tiny sliver of those travelers. About 3% of all vehicles sales last year were electrics, and plug-in vehicles represent an even smaller share of overall vehicles on the road.
High gas prices are not the only reason travelers will take a financial hit this year.
The average price of a hotel room is up 10.5% from its pre-pandemic level, according to STR, which analyzes hospitality data nationwide. Meanwhile, restaurant tabs, which plummeted in the first year of the pandemic, are now running 6.9% higher than a year ago, according to government statistics.
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
Pain at the pump
Metro Atlanta average gallon of gas
Tuesday morning: $4.13
One week ago: $4.12
One month ago: $3.73
One year ago: $2.95
Average price for a gallon of regular gas, state of Georgia
Pre-Memorial Day, 2022: $4.15
Memorial Day, 2021: $2.91
Memorial Day, 2020: $1.88
Memorial Day, 2019: $2.61
Memorial Day, 2018: $2.84
Memorial Day, 2008: $3.91
Average price for a gallon of gas, and in 2022 dollars
Pre-Memorial Day, 2022: $4.15 ($4.15)
Memorial Day, 2021: $2.91 ($3.13)
Memorial Day, 2020: $1.88 ($2.12)
Memorial Day, 2019: $2.61 ($2.95)
Memorial Day, 2018: $2.84 ($3.26)
Memorial Day, 2008: $3.91 ($5.22)
Sources: AAA — The Auto Club Group, Energy Information Administration, Bureau of Labor Statistics