Some 48.3 million Americans will hit the road this Thanksgiving season, and on the way to grandmother’s house and other holiday destinations they are going to notice some of the highest gas prices in the last decade.
“This Thanksgiving, travel will look a lot different than last year," Paula Twidale, senior vice president, AAA Travel, told Convenience Store News. "Now that the borders are open and new health and safety guidelines are in place, travel is once again high on the list for Americans who are ready to reunite with their loved ones for the holiday."
All the travel will come with the usual congestion headaches and some sticker shock at the pump as gas prices have fluctuated higher this year, up more than $1 per gallon from 2020.
Thanksgiving Holiday Travel to Rise 13 Percent This Year
Travel will be up this Thanksgiving 13 percent vs. last year when the public was still waiting on COVID-19 vaccines to roll out.
“Thanksgiving is one of the busiest holidays for road trips and this year will be no different even during the pandemic," INRIX Transportation Analyst Bob Pishue, told Convenience Store News. "Drivers around major metros must be prepared for significant delays, especially Wednesday afternoon. Knowing when and where congestion will build can help drivers avoid the stress of sitting in traffic."
Congestion is not the only worry for drivers as gas prices have soared.
“It just continues to go up,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CNBC a month ago. “I think it’s just a matter of time until we get to $3.35 and maybe $3.40 until things get caught up.”
De Hann, unfortunately for consumers, was right on the money as AAA says the average gas price as of Nov. 15, 2021, was $3.41 per gallon nationally, just 70 cents shy of the highest ever recorded average price of $4.11 on July 17, 2008.
The $3.41 per gallon price is up from $3.31 a month ago and just $2.13 per gallon a year ago. At the start of the pandemic lockdowns in April 2020, the price per gallon in the U.S. was $1.77.
That $3.41 figure is for regular gasoline with mid-grade going for $3.76 per gallon (up from $2.48 a year ago) and premium going for $4.04 per gallon (up from $2.74 a year ago).
Drivers can find these gas price fluctuations and swings frustrating and maddening.
Factors That Cause Gas Prices to Fluctuate
While you might assume that gasoline prices at the pump are almost exclusively to crude oil prices, that only accounts for 43 percent of what you see on the C-store price sign.
Taxes, refining, distribution, and marketing make up the other 57 percent of gasoline prices.
With that being said, a $10 per barrel rise in crude oil will usually translate to a $0.25 per gallon increase at the pump.
But there are other factors at play that make gas prices fluctuate.
According to “The Balance”, “Gas prices and underlying oil prices are determined by three factors: supply and demand, commodities traders, and the value of the dollar.”
Here is a look at each
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Supply and Demand: Like almost all products, gasoline prices are affected by supply and demand. You do not have to be an economist to know that the basic principle is that when demand is greater than supply, then prices go up; and when demand is lower than supply, then prices go down. The supply and demand aspect of gas prices also accounts for the rises you might see at the gas station during summer travel months or around high-traffic holidays. Conversely, during low-travel windows, prices should drop.
Recent Events of Gas Price Fluctuations
Perhaps the best way to study gas price fluctuations is to look at how recent events have changed gas prices, according to The Balance, which looked at U.S. Energy Information administration statistics:
- August 2012: $3.80 per gallon – U.S. refineries close due to hurricane
- February 2013: $3.85 per gallon – Political turmoil in Egypt
- April 2014: $3.60 per gallon – Political turmoil in Iraq, Nigeria, and Ukraine
- November 2016: $2.21 per gallon -OPEC cuts oil production
- May 2018: $2.96 per gallon – U.S. cuts ties on Iran nuclear agreement
- December 2019: $2.57 per gallon – Combined overproduction and lower demand for oil
- April 2020: $1.77 per gallon – COVID-19 global pandemic plummets demand
Contact PWM today to find out how our high-quality electronic price signs can keep drivers informed of the latest prices during holiday travel and beyond.
