With the average price per gallon jumping by 9.4 percent in August, gas prices are the highest they have ever been heading into Labor Day weekend. Thankfully, the high price at the pump is expected to fall quickly now that various production issues have been dealt with.
According to AAA, the high prices were brought about by the biggest single monthly percentage gain in more than three years.
Gas prices were pushed through the roof after a large fire at a Chevron refinery in Richmond, California followed by worries over the European sovereign debt crisis. Throw in hurricane concerns and other production issues at plants around the country, and the perfect storm of production woes was upon much of the United States. Prices were also hurt by further threats from Iran to slow the shipment of oil through the Strait of Hormuz and uncertainty over the country’s nuclear program.
Moving forward gas prices will be assisted by increased production from Gulf Coast refineries that have increased production. Hurricane Isaac was also less serious than analysts had predicted. The end to the summer blend of gasoline will also end on September 15, which should push prices down by 20 cents per gallon over the next month.
Signs of declining gasoline prices started on Saturday when the national average fell by two-tenths of a cent to $3.83, the first decline in gas prices in nine days.
The Labor day gas price record was previously in 2008 when prices peaked at $3.67. Gas prices would later tumble following the financial market meltdown.
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