Motorists across the U.S. are grappling with gasoline prices that are reaching new records almost daily, but the pain isn't evenly distributed across the nation. Take the handful of locations where a gallon of regular fuel now costs as much as the federal minimum wage of $7.25.
It's a painful threshold that prices at the pump have reached at 11 stations — all in California, according to GasBuddy's Patrick De Haan, an expert on oil and gas prices. Granted, the minimum wage in California is far above the federal minimum wage, with workers in the state earning at least $14 an hour, but paying $7.25 a gallon or more still takes a chunk out of the typical paycheck.
On average, California drivers are paying more for gas than drivers in any other state — an average of $6.16 gallon as of May 31, according to AAA. That is partly due to higher taxes in the state to pay for infrastructure and other costs, but there's also something that economist Severin Borenstein of the University of California, Berkeley, calls a “mystery gasoline surcharge” — a price gap that can't entirely be explained by fees or other factors.
Here are the service stations in California charging at least $7.25 as of May 31, according to GasBuddy:
- Chevron at 901 N. Alameda St. in Los Angeles: $8.05 a gallon
- Mobil at 8489 Beverly Blvd. in Los Angeles: $7.49 a gallon
- Shell at 900 North Hill Street in Los Angeles: $7.45 a gallon
- Shell at 453 Main St. in Bridgeport: $7.39 a gallon
- Chevron at 51557 US-395 in Lee Vining: $7.39 a gallon
- Chevron at 47047 CA-1 in Big Sur: $7.37 a gallon
- Valero at 377 Main St. in Bridgeport: $7.35 a gallon
- Shell at 125 Sharon Park Dr. in Menlo Park: $7.29 a gallon
- Mobil at 22 Vista Point Drive in Lee Vining: $7.29 a gallon
- Mobil at 4349 Laurel Canyon Blvd. in Studio City: $7.29 a gallon
- Shell at 51424 US-395 in Lee Vining: $7.29 a gallon
As Americans returned to work after the Memorial Day weekend, average gas prices were at a record $4.62, up from $4.18 a month ago and $3.04 during the same period last year, according to AAA.
Elsewhere around the U.S., De Haan warned in a tweet on Memorial Day that gas prices could continue to rise in the Great Lakes region and in Florida, where a gallon of regular in cities such as Tallahassee and Palm Beach already costs $4.69, according to GasBuddy.
Drivers spending thousands more on gas
Americans are increasingly pessimistic about the economy, driven by concerns about the highest inflation in 40 years and a stock market that has plunged due to fears of a recession,to a new CBS News poll. While motorists continue to fill up at the pump, they are cutting back on spending in other areas — like dining out — to compensate.
The impact of high gas prices is adding up: the typical household is now spending $4,800 on gas at an annual rate, compared with $2,800 a year ago,to Wall Street analyst Ed Yardeni.
Unfortunately, analysts aren't forecasting that gas prices will recede anytime soon. De Haan thinks there's a good chance prices will hit $5 a gallon this summer, while an even more pessimistic analysis from JPMorgan recently forecast the national averageby August.
Borenstein of Berkeley recentlyCBS News that he doesn't foresee $2 or $3 per gallon gas anytime soon. That's because crude oil prices have jumped since a year earlier, and world demand for fossil fuels is rising even as supply is lagging, he noted.
“Even beforewe were seeing the production of oil lagging. Producers in the United States are reporting they're having a hard time getting workers to come back to the oil fields,” Borenstein said. “They're having supply-chain problems with parts and equipment.”
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