It’s October. The summer driving season, traditionally defined as between Memorial Day and Labor Day, is well behind us. Demand for gasoline is down, compared to the summer, because people aren’t driving around on summer vacations. And yet, despite that reduced demand, prices are still high — in fact, prices are really high by historical standards for this time of year.
Last month, the U.S. Energy Information Association calculated that the average price for all grades and formulations nation wide was $3.95. This morning, the American Automobile Association puts the national average for a gallon of regular gas at $3.81. By historical standards, that’s really high; in fact, that $3.95 average in September appears to be the highest in the EIA’s records for that month.
Still, 49 states can look at California and say, at least we’re not in that mess:
The average price of a gallon of gas in California on Friday reached $6.08, up some 80 cents or 15 percent since a month ago, according to data compiled by AAA. At some gas stations in Los Angeles, prices are hovering around $7.00 a gallon.
California’s prices are spiking because “four of the state’s 14 oil refineries are producing at substantially lower levels than normal due to slowdowns caused by weather-related damage or much-needed maintenance.” If only someone had warned America that we needed more refinery capacity. As I wrote last spring, it doesn’t matter how much we “drill, baby, drill,” unless we also have the ability to “refine, baby, refine.”
As the Wall Street Journal noted this weekend, gas prices have a larger-than-expected impact on people’s perceptions of the economy, because people buy it regularly, they have a clear sense of what they usually pay, and the prices are listed on big signs by the side of the road.
We’re going to get another round of “Why aren’t Joe Biden and the Democrats getting more credit for the good economy?” columns, all shrugging past the fact that gasoline prices are still high and that adds to the cost of shipping or moving any good, which leads businesses to pass on those expenses to consumers.