Gas prices expected to remain elevated this summer
After bottoming out at $2.24 in early January – their lowest level since December 2016 – gas prices rose sharply during the first few months of 2019. Pump prices reached $2.90 by early May, or 66 cents per gallon higher than their level at the start of the year, according to data from the U.S. Energy Information Administration (EIA).
At the same time, total eating and drinking place sales also increased steadily during the first five months of 2019, which suggests that the higher gas prices didn’t crowd out consumers’ ability to spend in restaurants.
Gas prices eased somewhat in recent weeks, and by mid-June had drifted down to $2.67 a gallon, per EIA.
Looking ahead over the upcoming peak summer driving months, gas prices aren’t expected to move much from where they are now. EIA projects that the price of regular gasoline will average $2.73 per gallon during June, July and August.
Although this is down slightly from the average of $2.86 during the same three months in 2018, it is roughly 20 percent higher than the comparatively modest pump prices that consumers enjoyed during the 2016 and 2017 summer seasons. Still, $2.73 is a far cry from the four consecutive summers with average gas prices above $3.50 between 2011 and 2014.
On the aggregate, households can typically absorb a moderate seasonal run-up in gas prices. However, a prolonged period of high gasoline prices has the capability to alter spending patterns within the restaurant industry.
Gas prices typically vary significantly by region, and the 2019 summer driving season will be no different. Average pump prices during the peak summer driving months will range from $2.44 in the Gulf Coast district to $3.22 in the West Coast district, per EIA projections. Consumers in the East Coast, Midwest and Rocky Mountain districts will likely see gas prices similar to the national average this summer.
Read more analysis and commentary from the Association's chief economist Bruce Grindy.