Gas Prices Jump Above $3 in 7 States

By Douglas A. McIntyre Published May 22, 6:33AM EDT

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Just ahead of the Memorial Day weekend, one of the periods when Americans are on the road in the greatest numbers, gasoline prices have moved above $3 in seven states. High gas prices will send the cost of travel for the weekend, which starts the summer, higher and hit driver’s pocketbooks as the cost of an average gallon of gas rises to the highest level this year.

The AAA forecasts that 33 million people will drive over the three-day holiday weekend. Nationwide the price per gallon of gas has reached $2.74, against a price of $2.48 a month ago, the AAA also reports. The primary cause for this is oil prices, which have risen to over $60 a barrel, after dropping to below $48 in March. Some of this increase is due to a drop in fracking because oil prices are still relatively low and not enough to support some fracking operations. Another part is due to forecasts of increased global demand.

In seven states, the pain will be particularly acute as the price of the average gallon of gasoline has spiked from below $3. These include Alaska at $3.36, California at $3.78, Hawaii at $3.27, Nevada at $3.31, Oregon at $3.03, Utah at $3.02 and Washington at $3.04.

Two things other than oil prices tend to drive up gas prices. These are state gas taxes and proximity to large refineries. As might be expected, the states with high gas prices tend to have high motor fuel taxes, according to the American Petroleum Institute. California, Hawaii, Washington, Nevada and Oregon are among the top 15 based on these taxes, which puts all of them above the national average.

Alaska, Nevada, Oregon and Washington have a no huge refineries like those in Texas. This means that some, if not all, of their gasoline has to be shipped in from other states, pushing up transportation costs.

Memorial Day may only be the start of the financial suffering for drivers. Many experts forecast gas prices will rise between the weekend and Labor Day. High gas prices are back just in time of the heavy travel season.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.