Gas prices across the country continue to surge and hit another all-time high on Wednesday with the average price for a gallon of regular coming in at $4.67, according to AAA data.
The new average high for the U.S. is 50 cents per gallon more than a month ago and over $1.60 per gallon more than the same time in 2021.
Utah hit another record itself on Wednesday as prices jumped six cents in the last 24 hours and is now selling for $4.75 per gallon on average across the state. Utah prices are up over $1.40 per gallon since this time last year.
Demand for gas has rebounded almost completely since pandemic conditions stifled the market. How high will prices have to go now before consumers begin changing habits to avoid the pump?
Demand vs. pump prices: Bottled-up travel urges, developed under the umbrella of long-running COVID-19 restrictions, have driven demand this year back to levels not seen since pre-pandemic times even as gas prices have surged over the past few months. But AAA spokesman Andrew Gross says prices are quickly approaching the point where costs could begin to alter, or dissuade, driving decisions.
“So far, the pent-up urge to travel caused by the pandemic outweighs high pump prices for many consumers,” Gross said in a statement. “But 67% of drivers recently surveyed told us they would change their driving habits if gas hit $4.50 a gallon. That number rises to 75% at $5 a gallon. If pump prices keep rising, will people alter their summer travel plans? That remains to be seen.”
How high is too high? Seven states now average $5 or higher, with New York and Arizona quickly closing in on that benchmark, according to CNET. As we head into summer, analysts predict even higher prices at the pump. The nationwide average could surpass $6.20 a gallon by August, according to a report by JPMorgan. California has already reached that threshold, with San Francisco averaging $6.49 and Mono County hitting $7.05.
Eventually, experts say, the high cost of fueling up will lead to demand destruction, when motorists actively curtail gas consumption to save money.
Matt Smith, a data analyst with Kpler, told USA Today that an average of $5 per gallon is “by no means beyond the realms of possibility.”
“Gasoline prices will remain high as long as oil prices remain in the triple digits,” Smith said. “It’s going to hit the pocketbook far harder.”
With expectations of strong driving demand through Labor Day, JPMorgan analysts predicted the price could surpass $6 a gallon before this fall, per CNET. Natasha Kaneva, JPMorgan’s head of commodities research, said the price per gallon could jump to $6.20 per gallon by August, Insider reported.
The magic number: Grist reports a March Gallup poll found that Americans on average say gas prices would need to reach about $5.30 a gallon to “make them cut back on spending in other areas or make significant changes in the way they live their lives.” Eighteen percent of respondents said gas would have to hit $6 or more a gallon before they’d change their behavior.
According to Grist, anecdotes reported by the Boulder Daily Camera echo the Gallup findings. Gas-station manager John Bishop said: “I don’t think it’s got to the point where [people are] going to start taking public transportation. I’m thinking $5 might be the magic number.”