The road higher for gas prices has been as clear as can be of late as prices have been on a tear. According to AAA, the national average price of a gallon of gas has risen 17.3% YTD through 3/25. That’s a full seven percentage points above the average YTD gain for this time of year and the largest YTD increase through 3/25 since 2012. Even after the gains, though, the average price is only four cents higher now than it was a year ago. What’s ironic about this year’s gains in prices is that they are coming at a time when inflation is just about the last worry on anyone’s mind.
The chart below compares the change in gas prices this year to an annual composite chart of prices going back to 2005. While prices are higher this year, and the move has been much larger than normal, we would note that prices typically rise at this time of year. They also typically continue to rise right up until Memorial Day when the summer driving season kicks off. For most of the summer, prices then plateau and then start to rapidly decline heading into year-end.
One reason behind the much larger than average increase in gas prices this year is that lately, prices have barely gone down- not even for a day here and there. Check out the chart below. Over the last 42 calendar days, the national average price of gasoline hasn’t declined once. Going back to 2004, there have only been two other streaks that are longer (2009 and 2011), and if prices don’t decline today or tomorrow, the current streak will move into a tie for second.