California has never been the cheapest state to fill up your car’s gas tank, but things have never been this bad before.
The average cost per gallon in California has topped $6 for the first time, coming in at $6.05, according to AAA. That’s nearly $1.50 above the national average and 6% higher than a month ago. The bigger fear, though, is that it could be a warning for the rest of the nation.
JPMorgan, in a report to investors and an analyst interview with CNN, says there’s a real risk that $6 per gallon could be the national average by August. That follows a similar warning made in March by a longtime U.S. diplomat who served as an American diplomat for 30 years in Washington, Bahrain, Saudi Arabia, Syria, Tunisia, and the United Arab Emirates.
Americans, after being largely cooped up for the past two years, are determined to travel this summer, which increases demand. One survey, by The Vacationer, a travel site, found that nearly 60% of Americans (some 153 million) plan to travel on Memorial Day weekend—and the primary mode of transportation will be their car.
Not everyone is expecting prices to continue to increase, though. The US Energy Information Administration last week projected national averages will drop to $3.59 a gallon during the final quarter of the year.
Currently, the national average stands at $4.57, according to AAA.
If prices continue to rise, it could have a significant impact on the U.S. economy, reducing consumer demand for a wide swath of products as people tighten their belts to offset the cost of daily commutes. Some economists worry that could lead to a greater risk of inflation.
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