It's not your imagination, gas prices are indeed increasing
After several years of low gas prices, the prices you’re paying at the pump have been steadily creeping up to hit a ten-month high this week.
According to Mark Jenkins with AAA, the current statewide average in Tennessee is 22 cents more per gallon than it was a year ago, the highest daily average since June of 2016.
But there is good news, at least in the immediate future. “Falling oil and wholesale gas prices should signal lower prices at the pump this week,” said Jenkins. “However, oil prices have been fickle this year, so motorists should expect continued volatility in the next couple of months as oil prices fluctuate, demand rises, and refineries complete the switchover to more expensive summer blends.”
The most expensive metro markets in the state are Memphis ($2.19), Knoxville ($2.19), and Nashville ($2.18). However, Chattanooga is among the lowest, with a current average of $2.13 a gallon, second lowest in the state.
The volatility in the oil market has led to both the recent increases and hope for future decreases. Oil prices hit a three-week low in trading this past Friday, with a barrel of oil trading at just under $49 as gallon.
The decrease was attributed to news that while Russia plans to agree with cuts in oil production announced by OPEC last year, total U.S. petroleum deliveries in March reached their highest point for this time of the year since 2008.
Simply put, while much of the foreign oil producing countries are trying to scale back output, the U.S. is surging ahead, to make up for the drop and keep pace with increasing demand.
So, what does this mean for Chattanooga drivers? Not much, overall. Yes, we are paying, on average, 22 cents more per gallon than a year ago, but we are still paying a lot less than most of us ever have for gas.
According to data from the U.S. Energy Information Administration and inflation figures from the Bureau of Labor Statistics Consumer Price Index, when we adjust for inflation, we are paying far less.
For example, adjusted for inflation, a gallon of gas in 2008 would have cost us $3.54. In 1981, it would have been $3.51. And to really bring it all into perspective, 100 years ago, a gallon of gas would have cost us $3.92 for our horseless carriages.
And when you take into account that our vehicles have much higher MPG ratings than ever before, we get a lot more bang for our buck, at least in how far we can drive on a tank of gas.
So while it may be a bit annoying to see the pump prices creeping up again, rest assured we are still living in a relative golden age of energy prices.
Let’s just hope it stays that way for the near future.