The switch from winter to spring brings higher gasoline prices to U.S. consumers, though some states are seeing increases sooner than others. File photo by John Angelillo/UPI | License Photo
March 6 (UPI) -- Consumers wary about soaring inflation could be frustrated with the recent increase in gasoline prices, though data Monday from AAA show prices are still well below levels from this time last year.
The travel club listed a national average retail price of $3.40 per gallon for Monday, a good 4 cents higher than this time last week. Some states, however, are seeing spikes even higher than that, with Indiana's state average price of $3.42 per gallon marking a 20 cent-per-gallon increase over week-ago levels.
That state-level increase is largely attributed to the switch from the winter-blend to the summer-blend of gasoline. Refineries during the cold winter months don't need to take the extra steps necessary to keep gasoline from evaporating, steps that make the summer blend more expensive.
Refineries need to start making the summer blend no later than March 1.
"Some regions are moving to the required summer gasoline in different steps than others, and the fragmentation of required blends absolutely plays a role in these price increases," Patrick De Haan, the head of petroleum analysis at GasBuddy, said. "Logistical challenges in making the transition during a time when refiners are also doing maintenance work can create hotspots and lead to noticeable jumps in prices during the spring."
Consumers so far, however, seem unfazed by lingering inflationary pressures in the U.S. economy. Data for January show disposable personal income increased 2% from December and spending was up 1.8% to $312 billion.
Personal savings, meanwhile, improved by 0.2% from December levels, suggesting wage growth and hiring are supporting the U.S. consumer against inflation that's running at 6.4% to the 12-month period ending in January.
For gasoline, however, prices are up 2.4% from just December, when prices were flirting with $3 per gallon on the national level.
The consumer may be getting squeezed by policies at the U.S. Federal Reserve that are meant to curb inflation by way of higher lending rates for everything from new vehicles to mortgages. We'll get a clue about the state of economic affairs this week when Federal Reserve Chairman Jerome Powell testifies before U.S. lawmakers.
Despite some economic headwinds, the price at the pump is about 60 cents per gallon less than at this time last year. Prices could reach the $4 mark again this year on the back of summer travel demand, but the federal government is forecasting an average price of around $3.39 for the year.