Surging Gas Prices Hit Peak Ahead of Holiday Traveling Weekend

Gas prices may have finally topped out just ahead of the Memorial Day holiday as a modest decline in the national average cost ended a 12-day streak of record highs.

The national average of regular gasoline pulled back a slight 0.2 cents on Friday to stand at $3.225, according to the AAA.

According to the motorist group, nationwide, more than 38 million Americans — nearly 2 percent more than last year — are expected to travel at least 50 miles from home over the holiday weekend.

Some 84 percent planned to drive, in spite of high gas prices.

One reason may be that fuel costs, despite being at record highs, are not taking as big a chunk out of family budgets as they used to, according to the libertarian think-tank Cato Institute.

"High pump prices are not reducing demand because they are not imposing anything like the economic pain politicians allege," Cato's Jerry Taylor said in a report.

He said gasoline would have to reach $4.48 a gallon before motorists felt the same burden drivers did in 1962, when gas-guzzling muscle cars were in fashion.

U.S. gasoline prices are just below the inflation adjusted peak of $3.292 a gallon, hit in 1981 during the war between Iran and Iraq, according to the government.

American motorists are also still getting a bargain at the gasoline pumps compared with drivers in many other countries, thanks to lower taxes on fuel.

Oil companies, meanwhile, are being heavily criticized by U.S. lawmakers for reaping record profits while failing to boost the nation's fuel production capacity to keep up with consumption.

The Democrat-led U.S. House of Representatives approved legislation on Wednesday that would give the Federal Trade Commission more authority to probe price profiteering from gasoline and other refined products.

Reuters and the Associated Press contributed to this report.