Labor Day weekend gas prices are near all-time highs

Sep 1, 2023, 9:00 AM | Updated: 9:09 am

Gasoline prices are displayed at a Shell station ahead of the Labor Day weekend on August 28 in Wes...

Gasoline prices are displayed at a Shell station ahead of the Labor Day weekend on August 28 in West Hollywood, California. According to AAA, the average price of regular gasoline with self-service in Los Angeles County rose to $5.36 per gallon, 33 cents more than one month ago.

New York (CNN) — Drivers hitting the roads this Labor Day weekend will be greeted by historically high gas prices for this time of the year.

The record-high for gas prices during the week leading up to Labor Day was set in 2012 at $3.84 a gallon, according to a CNN review of federal data that goes back to 1990.

Current prices are just shy of that. The national average for regular gas is$3.83 a gallon as of Thursday, according to AAA.

Normally, prices at the pump cool off as the summer winds down. Not this summer.

For a variety of reasons — including OPEC holding back supply and extreme heat that has messed with refineries — gas prices have steadily increased this summer. The national average price for regular gas stood at $3.58 a gallon on Memorial Day, the unofficial start to summer.

“This is abnormal. Prices normally fade towards the end of the summer,” said John LaForge, head of real asset strategy at the Wells Fargo Investment Institute.

Eleven states across the country average $4 a gallon or more, according to AAA. That includes Illinois, Washington, Arizona and California.

The good news is that gas prices are still well below the peak set in June 2022. At that time, fears about supply disruptions in Russia sent oil prices skyrocketing, lifting the national average price for regular gas to a record of $5.02 a gallon.

Gas prices fell sharply from those levels as Russia disruptions failed to emerge and the Biden administration aggressively drained emergency oil reserves.

As recently as July 4th, drivers were saving significantly year-over-year on gas.

How extreme heat has lifted gas prices

However, the situation changed as oil prices jumped, boosted by easing recession fears and Russia and Saudi Arabia slashing production.

“Saudi Arabia has cut production to increase the price of crude oil and balance their budgets,” said Andy Lipow, president of consulting firm Lipow Oil Associates.

Gas prices have also been boosted by the record-high temperatures that have blanketed much of the country this summer.

Some of America’s aging refineries – the last major refinery was built in 1977 – can’t go all-out in triple-digit temperatures.

Analysts blame the heatwaves as well as heat-related power blackouts for causing outages at multiple refineries. Those have limited how much gasoline (and diesel and jet fuel) refineries can produce at a time of seasonally strong demand.

The latest data from the US Energy Information Administration shows that Gulf Coast refiners only operated at 92% of capacity last week.

“They’d like to run at 100%. They have the economic incentive to run at 100%. They just can’t because of the heat,” said Lipow.

Psychologically important prices

It’s worth noting that while gas prices are high for this point of the calendar, these figures aren’t adjusted for inflation.

On a real (inflation-adjusted) basis, monthly gas prices were well above $4 a gallon late in the summers of 2011-2014, according to the EIA.

Still, consumers are very sensitive to increases in gas prices, in part because of how visible they are. Many people view the price of gas as a key economic barometer.

In fact, the Conference Board blamed the recent uptick in gas prices for driving down consumer confidence in August.

“The average consumer isn’t thinking about it in inflation-adjusted terms,” said Lipow. “Because the price is shown at every corner, people see the price and think about what it used to be.”


We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Business + Economy

pay gap...

Curt Gresseth

Why is the gender pay gap not closing?

The gender pay gap in the U.S. and Utah is not closing. A Utah financial planner details the impact that wage shortfall can have on a women workers over a career.

18 hours ago

Henry Barlow said his new plant will save eight million gallons of water a year. (Mark Wetzel, KSL ...


‘We are going to feed American beef to the Americans’: Meat packing plant to open in Richfield

A new cattle processing plant in central Utah is expected to improve the state’s food supply chain.

1 day ago

A white Jeep crashed into a building in Ogden after the driver experienced a medial issue and lost ...

Curt Gresseth

Car crashes driving up cost of auto insurance

Replacement costs, inflation labor shortages, and more car crashes are all pushing up the cost of auto insurance.

2 days ago

a hockey stick shown, utah may get a nhl stadium...

Adam Small

Utah lawmaker asks for $1 billion for an NHL stadium in Salt Lake City

To fund an NHL stadium in Utah, Salt Lake City's sales tax rate would go from 7.75% to 8.25% if the bill is approved.

2 days ago

Image of an AT&T cell tower, as many AT&T customers report they are part of a massive outage....

 Melissa Alonso and Brian Fung, CNN

AT&T customers report a massive outage, disrupting phone service across America

AT&T acknowledged that it has a widespread outage but did not provide a reason for the system failure.

2 days ago

United Airlines aircrafts are parked at Newark Liberty International Airport in Newark, New Jersey,...

Ross Levitt, Pete Muntean and Samantha Delouya, CNN

United to resume non-stop service from US to Israel

United Airlines said it will resume flights from the United States to Israel beginning in March.

2 days ago

Sponsored Articles

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Wellsville Mountains in the spring with a pond in the foreground...

Wasatch Property Management

Advantages of Renting Over Owning a Home

Renting allows you to enjoy luxury amenities and low maintenance without the long-term commitment and responsibilities of owning a home.

Clouds over a red rock vista in Hurricane, Utah...

Wasatch Property Management

Why Southern Utah is a Retirement Paradise

Retirement in southern Utah offers plenty of cultural and recreational opportunities. Find out all that this region has to offer.

Labor Day weekend gas prices are near all-time highs