Gas prices across the U.S. have surged to a national average of $3.50 per gallon, following a rise in oil prices above the $80 per barrel mark, following nearly three weeks of stagnation, setting the stage for potentially higher travel costs as the July 4th holiday approaches.
“Summer got off to a slow start last week with low gas demand,” said Andrew Gross, AAA spokesperson. “But with a record 60 million travelers forecast to hit the road for the July 4th holiday, that number could pop over the next 10 days. But will oil stay above $80 a barrel, or will it sag again? Stay tuned.”
AAA is projecting a record 60.6 million people will travel by personal vehicle over Independence Day week -- an additional 2.8 million travelers compared to 2023. This year’s number also surpasses 2019, when 55.3 million people traveled by car over July 4th week.
Gas prices are still lower than last year, when the national average was $3.53.
AAA also reported a combined total of 71 million people are expected to travel by personal vehicle, air, buses, cruises and train.
The Energy Information Administration (EIA) reported a decline in gas demand from 9.38 million barrels per day (b/d) to 8.96 million b/d over the week leading to June 27, approximately 240,000 b/d below the same period last year. Despite this drop in demand, total domestic gasoline stocks rose from 231.2 to 233.9 million barrels. These factors may help moderate the rise in pump prices, despite the upward pressure from higher oil costs.
Several states are adjusting their fuel taxes and fees starting July 1. Indiana will increase the tax on gasoline and gasohol by one cent to 35 cents per gallon. Virginia will also raise its tax on gasoline, gasohol and alternative fuels by one cent to 30.8 cents per gallon. Michigan will maintain its current gas tax rate at 18.8 cents per gallon while reducing the clear diesel fuel and kerosene tax from 21.3 cents per gallon to 20.4 cents per gallon.
The June 27 national average gas price of $3.50 is nine cents less than a month ago and six cents less than a year ago. The most expensive markets include California at $4.80 per gallon and Hawaii at $4.71 per gallon. In contrast, Mississippi and Louisiana offer the lowest prices at $2.91 and $3.01 per gallon, respectively.
