Gas prices are at a 7-year high, just in time for Memorial Day weekend 2021 – Fresno, California

Fresno, California 2021-05-28 09:17:28 –

New York –A nasty surprise awaits 34 million drivers expected to drive on US roads on Memorial Day weekend, expected to hit the highest petrol prices in seven years.

This can be the biggest problem for those who use the highway during the summer vacation. According to experts, the gas shortage experienced earlier this month when the main pipeline was closed could be on the horizon again.

This time, a shortage of fuel-carrying tank truck drivers may have triggered repeated panic buying by travelers hoarding tanks.

“I think we need to worry about prices, supplies and crowd behavior,” said Tom Kloza, global head of energy analysis for the Oil Price Information Service, which tracks AAA gas prices.

More demand equals higher price

First is the price. According to AAA, the national average cost of a gallon of regular gas is now $ 3.04, almost in line with the seven-year highs earlier this month, up 58% from a year ago.

Last year, home orders were placed early in the pandemic, causing oil and gas prices to plummet, with an average price per gallon below $ 2. However, prices are still up 7% compared to Memorial Day 2019.

The rise in crude oil prices brought about by the recovery of economic activity and the subsequent rise in fuel demand is driving this increase. The start of this weekend’s summer driving season will also boost demand and put more pressure on prices, similar to the annual requirement for gas stations to switch to more expensive “summer blends” designed to reduce seasonal smog. To.

However, due to differences in taxes and fees, fuel supply from refineries in specific areas, etc., prices vary greatly at about 150,000 stations nationwide. Only one-third of US gas stations sell gas for more than $ 3 per gallon, but higher-priced regions are pushing the national average. Still, the most common price across the country is just 0.1 cents below $ 3.

For example, almost every station in California sells petrol for over $ 3.75, with a typical average price of $ 4.17. Louisiana and Mississippi, on the other hand, average $ 2.72 per gallon nationwide, with few stations charging $ 3 in either state.

Repeated shortages?

Despite the high prices, the potential shortage of gas could be a more serious problem than this summer.

The Colonial Pipeline, the main artery that carries fuel from the Gulf Coast refinery to the east coast, was closed for about a week by a cyberattack.

But experts aren’t worried about another malicious hack, but rather a serious shortage of truck drivers who are qualified to drive tankers that bring petrol to the station.

According to the industry group National Tank Truck Carriers, an estimated 20% to 25% of tanker trucks are currently parked due to a shortage of drivers. But even before the pandemic, there was a shortage of drivers as the industry lost many drivers during the economic slowdown that caused the demand for gas to plummet.

Supply shortages can initially affect only a few small independent stations. But the worry is that even a handful of depleted stations can cause panic buying, especially in the beach community and other vacation hotspots.

After all, as with the colonial closure, the replenishment of tanks by nervous drivers is a major cause of the recent shortage, Croza said. And the fresh memories of that shortage are of that sort. He added that it only makes panic buying more possible.

“I think people are much more likely to panic than they used to be,” Croza said.

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