It may not make much sense, given that the economy remains weak, but the cost of filling up your car is about to go higher.
Seasonal influences are strong this time of year and account for much of the expected increase that many analysts say will push gasoline to a nationwide average of at least $3 per gallon this spring. Rising oil prices also are a factor in higher gasoline prices.
“There is no legitimate fundamental reason for higher prices, but it is March 1st, so we have to expect to see them,” Peter Beutel of Cameron Hanover said Monday of oil prices in his report. “Reasons have a way of materializing at this time of year.”
Wholesale prices for the April gasoline contract on the New York Mercantile Exchange are about 10 to 12 cents higher than the March contract that expired Friday. Much of the rise comes from refiners switching to more expensive summer blends of gasoline designed to meet tougher pollution standards in effect between April and September. The higher prices should make their way to the pump over the next few weeks.
At $3 per gallon, a typical motorist using 50 gallons of gasoline would pay about $150 per month for fuel. That is about $15 a month more than current prices. Drivers currently spend about 2.5 percent of their income on fuel.
The higher prices come at a time when most Americans’ incomes are stagnant. Incomes edged up 0.1 percent in January, below analysts’ estimates, according to the Commerce Department.
A family with one car is spending about 4 percent of its income on fuel currently, according to the Oil Price Information Service.
Gasoline prices were flat overnight, rising 0.1 cents Monday to a national average of $2.705 per gallon, according to auto club AAA, Wright Express and OPIS.
Prices have moved higher the past two weeks, approaching the 2010 high of $2.7583 per gallon set on Jan. 14. In the past week prices climbed 5.7 cents and are now 78.4 cents higher than year ago levels.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.