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NEW YORK (CNNMoney.com) — The days of cheap gas are retreating into the rearview mirror, as prices continue to flirt with the $2-per-gallon mark.
The national average price for a gallon of unleaded gasoline edged down 0.1 cent to $1.965 Monday, according to the motorist group AAA. This is bad news for the growing ranks of jobless Americans, who are pinching pennies and looking for ways to cut costs.
The current price would have been welcomed by summertime drivers, because it’s less than half the all-time high of $4.114 per gallon, achieved last July 17.
But since gas prices slumped to a low of $1.616 per gallon on Dec. 30, they’ve jumped more than 20%. At their current rate, prices could easily eclipse $2 per gallon.
This is occurring as crude oil prices are trading well below $40 a barrel.
“I think what you’re seeing now is a backlash of a period, from the end of the summer until the end of the year, when refiners were selling gas into the consumer market at a discount to crude oil,” said Ben Brockwell, director of data pricing for OPUS.
Brockwell said refineries lost money last year, despite the surge in gas prices. The refineries in the latter half of 2008 were paying top dollar for oil, and then producing gasoline in a low-demand economy, he said. Now, refineries are producing less, driving up prices in even this low-demand economy, while stockpiling discount oil, he said.
It’s hard to tell how this impacts Americans, who have been cutting back on driving since last year, and who have avoided the gas-guzzling larger vehicles, said Moody’s chief economist John Lonski.
“You’d rather see energy prices lower, but it doesn’t serve right now as one of the primary worries that affects consumer spending,” said Lonski. “I would think that of the list of things to worry about, it does not yet rank as high as it did this spring or early summer, when gas prices were at stratospheric levels.”
Michael K. Galvis 