Here’s why you’re paying so much more at the pump this Memorial Day
Gasoline prices are way up this year heading into the Memorial Day weekend, the traditional start to the summer travel season, and Bay Area residents are paying among the heaviest tolls.
In California and Santa Rosa, the average price at the pump for a gallon of regular gas is about 60 cents higher than it was near the end of May last year, and the reason is said to be simple: crude oil prices are on a year-long run from around $50 to just over $70 a barrel.
In California, which tends to have the priciest gas in the nation, the average price Wednesday was $3.71, up ?58 cents from a year ago, and Santa Rosa’s average was $3.75, up ?64 cents over the year, according to the GasBuddy.com website.
The national average, by comparison, reached $2.96 a gallon Wednesday, its highest point since November, 2014, according to GasBuddy, which credited the rise to “a recent rally in oil prices.” Typically, every $1 increase in the cost of a barrel of oil boosts gasoline by 2.5 cents per gallon.
A year ago, the national average was $2.37.
So does that mean more Americans are going to substitute vacations for staycations and avoid the increased cost of burning fossil fuel?
Two organizations that track travel trends have come to opposite conclusions, and an academic expert said gas prices are unlikely to discourage people from getting out of town.
GasBuddy said a survey of its members found only 58 percent plan a summer road trip, down 24 percent from last year, and 39 percent cited high gas prices as a reason.
Overpaying at the pump was cited as the “No. 1 road trip fear,” followed by car breakdowns and uncertainty over cleanliness of service station bathrooms, GasBuddy’s statement said.
Those who do drive this summer will stay closer to home, with only 31 percent traveling more than 500 miles round trip, compared with 56 percent last year, the company said.
Twenty-five percent fewer people plan to take trips longer than one week this summer, while weekend trips will be up 17 percent, GasBuddy said.
AAA, while also reporting that motorists will pay the most at the pump since 2014, predicted that 37 million Americans will hit the road this weekend, nearly 5 percent more than last year.
Higher gas prices “are not keeping holiday travelers at home,” the organization’s statement said, adding that travel is expected to increase for the fourth straight year.
“A strong economy and growing consumer confidence are giving Americans all the motivation they need to kick off what we expect to be a busy summer travel season with a Memorial Day getaway,” Bill Sutherland, an AAA senior vice president, said in the statement.
The getaway started Wednesday, and motorists should expect the heaviest congestion will occur today and Friday in the late afternoon as commuters leaving work early mix on the asphalt with holiday travelers.
AAA said it expects to assist more than ?340,000 motorists at the roadside this weekend, with dead batteries, lockouts and flat tires the most common travel bummers.
Dan McTeague, a GasBuddy petroleum analyst, said in an interview he was unmoved by AAA’s forecast.
“I think we’re going to stick with what we have,” he said. “We were spot-on last year.”
Simple math indicates Americans intent on travel won’t be dissuaded by gas prices, said Severin Borenstein, a professor at UC Berkeley’s Haas School of Business.
A car that gets 30 miles per gallon would burn 40 gallons of gas on a 1,200-mile trip, meaning a $1 bump at the pump would add $40 to the trip budget, he said.
A 50-cent increase would add just $20, and Borenstein said neither amount would make much difference on a trip that includes food, lodging, entertainment and other expenses.
Besides, he said, “once you get outside California you get much cheaper gas.”
The big gas price hit to Californians’ wallets comes not from vacations but from commuting and other daily activities, Borenstein said.
The average resident uses one gallon of gas per day, or four gallons for a family of four multiplied by 365 days.
“That’s where it really starts to show up,” he said.