Gas prices drop, but consumers should brace for pricier summer blend fuel: AAA
Sticky inflation is likely to prevent a big rise in fuel costs, according to GasBuddy
The mid-week bounce in gas prices following a two cents decrease could be caused by increased demand and more expensive summer blend fuel, AAA said.
Despite rising slightly by midweek, gas prices remained cheaper than last week, but a switch to more expensive summer-blend gasoline could change that, according to the latest report from AAA.
The national average cost for a gallon of gas dropped to $3.37, two cents less than last week but a penny more than the cost of gas at the start of this week, AAA said. The fluctuation in prices within the week is likely due to increasing demand, oil prices and summer blend gasoline, AAA spokesperson Andrew Gross said.
"This blend is designed to lower emissions during the summer and is more expensive to refine," Gross said. "Switching to summer blend usually adds about five to ten cents to the price of gasoline."
Shopping for cheaper auto insurance is another way to lower your auto costs. You could consider changing your auto insurance provider if you want to save money on your auto costs. You can visit Credible to find your personalized premium without affecting your credit score.
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Sticky inflation helps keep gas costs lower
U.S. drivers this year have so far spent an average of about 26.3 cents less per gallon of gas than a year ago, according to GasBuddy. It’s likely that "sticky inflation" will help keep prices lower as the market heads into what are traditionally more expensive summer months for gas.
January’s Consumer Price Index (CPI), a measure of inflation, showed a continued improvement in the level of inflation. Still, the concern is that inflation will take more time to come down to the 2% rate the Federal Reserve has targeted.
As a result, interest rates will likely continue to increase as the Fed maintains its restrictive monetary policy to beat inflation, GasBuddy’s head of petroleum analysis Patrick De Haan, said.
"Some nine out of 10 states saw declines over the last week, so the drops are showing up for most across the country, with the exception of the West Coast as the transition to summer blends continues, and in the Great Lakes, where prices cycled last week but have now resumed declining," De Haan said. "For the weeks ahead, tradition tells us to expect prices to move up eventually, but that could be at least be partially offset by inflationary data that continues to be hotter than expected, leading to anxiety that the Fed will boost interest rates and cooling the economy and oil demand considerably."
If you are struggling with rising prices and want to save money, you could consider finding a new auto insurance provider to lower your monthly premium. Contact Credible to compare multiple car insurance providers at once and choose the one with the best rate for you.
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Some tips for saving money at the pump
While gas prices have remained relatively steady since hitting a new record of over $5 per gallon last year, consumers remain price weary. Most U.S. drivers (74%) have become more price-conscious at the pump, according to GasBuddy’s annual Pump Habits study.
These are some tips on how drivers can save, according to the study:
Shop prices before pumping
Seventy-nine percent of drivers said they bought gas only to find it cheaper at the next station they drive by, according to the study. Using an app that displays gas prices in your area could help you avoid this costly mistake.
Avoid last-minute gas decisions
Waiting until your tank is empty means less choice when pumping gas and lessens the opportunity to compare prices. Yet 64% of Americans said they have come close to or run completely out of gas.
"Often, filling your tank is an afterthought, which robs you of hundreds of dollars per year," De Haan said. "Motorists should get in the habit of picking a price, not picking a station."
If you are shopping around for new auto insurance, you can use the Credible marketplace to compare multiple providers and find your personalized rate in minutes.
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