Gas prices at all time high for February
I thought it was bad in Illinois. We have a very high gas tax in this state, consequently, our price per gallon usually comes close to leading the nation.
But it turns out the entire country is getting socked by rising fuel costs.
With pump prices at their highest level on record for this time of year, the stage is set for an even greater climb in gasoline prices and expenditures than in 2012. Retail gasoline prices have surged 17 cents in a week to top $3.50 a gallon on average, posting the highest prices on record for the beginning of February.
According to AAA, the national average price of regular gasoline is $3.52 a gallon, 4 cents higher than the average price a year ago. The average price was $3.35 a gallon a week ago and $3.30 a gallon a month ago.
Meanwhile, the U.S. Energy Information Administration reported Monday that gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4 percent of income before taxes. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Gasoline prices averaged $3.63 a gallon in 2012, according to EIA.
Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures, according to the EIA.
The spring rally in gasoline prices typically starts in late February or early March, so this year's gains have come earlier than is usually the norm.
Analysts said the uncharacteristically early price rise is due to several factors: some refineries closing permanently or shutting down for maintenance, climbing crude oil prices, and a shortage of supply in California, requiring fuel to be diverted from other areas of the country to make up for reduced inventories.
Gasoline futures set an all time high for January, which does not bode well for prices over the next several months. Some analysts are expecting record highs for gasoline by the end of the year.
This will certainly put inflationary pressures on food while reducing the amount of income Americans can spend to buy goods and services. In a weak economy, the news just doesn't get much worse.