The previous time gas hit a record high was during the Great Recession, when the national average reached $US4.11 a gallon in July 2008.
But by the end of that year, it had fallen 60 per cent, to $US1.62 a gallon, as demand plunged. But cheap gas was of little consolation to the nearly 3 million people who lost their jobs during those five months.
So far, drivers have seen relatively little relief at the gas pump from the recent fall in oil and petrol futures. The national average price of gas has fallen only 4 per cent, or 22 cents, since the June 14 record, while wholesale gas futures have dropped 22 per cent.
US petrol retailers have little incentive to cut prices more deeply with strong demand for petrol with the summer driving season in full swing.
“There’s no compelling reason for retailers to lower their price more with this strong demand,” said Kloza.
There could be more price drops at the pump in the near term – a decline of another 10 cents a gallon in the next week or so wouldn’t be a surprise, Kloza said. Station owners who are paying less for wholesale gas will be watching how much of the savings their competitors are passing on to customers before they set their own prices. But the expression that gas prices go up like a rocket and come down like a feather is likely to play out once again, Kloza said.
There likely won’t be any big declines until schools reopen and the summer driving season ends this fall, he predicted. There are also risks that further developments in Russian oil exports tied to the war in Ukraine or hurricanes hitting US oil infrastructure along the Gulf Coast could send prices climbing up rapidly once again.