We are now officially in the heart of the summer driving season, and after a big spike higher earlier this year, prices at the pump are starting to level off just as they typically do at this time of year. According to AAA, the average price of a gallon of gas currently sits at $2.76 per gallon, which is down 1.7% from the YTD high in mid-June. Prices at the pump are currently up 23.1% YTD and 36% from their lows in January. While a 23.1% increase in gasoline prices looks large, it is only slightly more than average. As shown in the table to the right and chart below, the average price of a gallon of gas is typically up 21.7% YTD at this time of year. Also, in looking at the composite chart below, the bulk of the gains for the year are behind us as prices tend to level off in the summer. That spike you see in prices right around Labor Day is actually a distortion caused in 2005 by Hurrican Katrina when prices spiked over 15% in less than a two-week period.
Although prices are up so far on the year, on a Y/Y basis gasoline prices are still down significantly from where they were last year at this time. Last year at this time a gallon of gas was $3.64 per gallon, or 88 cents above the current price of $2.76. So where it cost the average American nearly $55 to fill up their 15-gallon tank last year, this year it only costs a bit over $41.