Inflation-battered drivers are being forced to dig deeper into their wallets as gas prices creep up at the pump ahead of Labor Day weekend.
Gas prices, which have been steadily climbing in recent weeks, have neared $4 a gallon — soaring roughly 60 cents since the start of the year — as travelers get ready to hit the road for the unofficial end-of-summer holiday getaway.
The national average price of a gallon of regular gasoline stood at $3.82 as of Monday — 9 cents higher than a month ago and just 3 cents shy of last year’s average, according to the American Automobile Association.
At the start of the year, the average retail gas price stood at $3.33 — and hit $3.98 last week before slightly dipping.
The pain at the pump felt by drivers could complicate the Federal Reserve’s calculus as it weighs whether to keep hiking interest rates to rein in inflation when the central bankers meet next month.
Inflation has fallen well off its four-decades peak hit last year but remains stubbornly above the Fed’s 2% target rate at 3.2%. The core CPI — a key gauge monitored by the Fed which excludes volatile food and energy prices — rose 0.2% in July from a month ago, matching the 0.2% increase in June.
“Americans need to remember first and foremost that gas prices aren’t included in the inflation numbers which is why there is a big disconnect with gas prices and food from the inflation numbers people see on television,” Ted Jenkin, the co-founder of Exit Stage Left Advisors, told The Post on Monday.
Experts attribute the rise in gas prices to global supply production cuts and impacts of this summer’s extreme heat on refineries.
Saudi Arabia said earlier this month that it will extend its unilateral production cut of 1 million barrels of oil a day through the end of September in its effort to boost flagging energy prices.
The Saudi reduction, which began in July, comes as the other OPEC+ producers have agreed to extend earlier production cuts through next year.
West Texas Intermediate, the US benchmark, was up 22 cents to $80.05 per barrel on Monday while Brent Crude, the international benchmark, was down 4 cents to $84.44.
The oncoming hurricane season will also likely send prices even higher.
“Weather, and more specifically hurricane concerns, are often a bellwether for gas prices,” Matthew Carbray, founder of Ridgeline Financial Partners, told The Post.
“OPEC production cuts coupled with high travel demand are two negatives that don’t equate to a positive.”
The intense heat has also limited production since refineries are designed to operate at temperatures that fall between 32 and 95 degrees.
“The extreme heat has impacted refineries, which is about half the cost of a gallon of gasoline, and production has slowed in light of 100 degree days throughout the oil production regions in the US,” Carbray said.
Temperatures have routinely broke records this summer, particularly in the Sun Belt region stretching from Arizona to Texas.
Gas prices are still below the record levels from last year when oil supplies were disrupted by Russia’s invasion of Ukraine.
In June of last year, the average US retail gas price surpassed $5 for the first time in history.
The rise in gas prices are forcing Americans to deal with the one-two punch of higher fuel costs as well as inflation.
This story originally appeared on NYPost
