Gas prices in the US continue to rise and break records. On May 23, the national average for a gallon of gasoline was $4.596. In California, the average price of gas has surpassed $6 a gallon for the first time, currently standing at $6.069.
Gas Prices Keep Breaking Records – $6+ in California
Record high gas prices are causing financial pain to small businesses, some of which are still recovering from the disruption of the pandemic and labor shortages.
With regional differences in costs – with California being the only state to have broken the $6 per gallon mark – it is important small businesses are aware of regional fluctuations and where sells the least expensive gas, so they can make valuable savings.
Supply and Demand
Prices at the pump are being pushed up by tighter supply and increased demand. Data from the Energy Information Administration (EIA) shows total domestic gasoline stocks decreased by 4.8 million bbl to 220.2 million bbl. At the same time, demand for gasoline increased from 8.7 million b/d to 9 million b/d.
This combination of low supply and high demand, with volatile crude prices, are likely to continue pushing prices up at the pumps.
According to figures from the AAA, drivers in California are having to pay an average of $6.069 for a gallon of fuel, more than anywhere else in the country. This is an all-time high for California and the US.
Andrew Gross, a spokesperson for AAA, spoke about the rising cost of gas.
“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers. Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this years.”
The national average is around $4.595 a gallon, also a record high.
Most Expensive States for Gasoline
After California, the most expensive state for gas is Hawaii, where fuel costs an average $5.380. Nevada and Washington are among the highest for gas prices, costing an average $5.245 and $5.207 a gallon respectively. Alaska has also seen prices rise to an average $5.194 a gallon.
Least Expensive States for Gasoline
Oklahoma is the least expensive state for gasoline, where, as of May 23, the cost per gallon costs an average $4.037. This is followed by Kansas, where prices are $4.046, and then Arkansas, where drivers have to pay an average of $4.115 per gallon at the pump.
Fuel costs have a direct impact on small business overheads, and rising costs can impact a business’s cashflow, and affect the pricing of their products or services.
With costs rising above $6 in California and reaching record average highs across the US, the soaring cost of gas is especially detrimental to small businesses in which transporting goods or delivering services is crucial to daily operations.
The more heavily a small business relies on gasoline, the more important it is to stay up to date with the cost of gas and where offers the least expensive prices at the pump.
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Image: Small Business Trends