Families across the country are now planning their summer vacations, eager for this weekend’s Memorial Day kickoff of the spring and summer driving season to the beach, the mountains, fresh water lakes and streams, or any number of tourist sites in cities large and small. But on this coming three-day weekend, rising prices at the pump will be hard to miss. Like many past springs, prices for regular gasoline soared by almost 30 percent between the end of 2010 and May 16, 2011.
Unfortunately, there is no end in sight over the next several months. The Energy Information Administration at the U.S. Department of Energy projects that the average retail price of regular-grade gasoline will average $3.86 per gallon during the holiday driving season—from April 1 to September 30—up $1.10 from last summer, and increase almost 40 percent. And prices of futures and options contracts for gasoline—the way financial markets measure future expectations of major buyers and sellers of gasoline—predict there is a 33 percent chance that the national monthly average retail price for regular gasoline could exceed $4.00 per gallon this July.
High and rising prices mean that families will spend more on fueling up their cars to go to work just as more and more people are finding jobs again. And businesses will have to spend more on transporting goods, hurting consumers again with higher prices and pinching businesses, especially smaller ones, putting a damper on investments and hiring.
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- Not Again by Christian E. Weller and Jaryn Fields