Americans preparing for Thanksgiving travel face the highest gasoline prices in more than six months, with prices at the pump topping $3 per gallon in New York and on the West Coast.
The average retail gasoline price was $2.89 a gallon on Nov. 15, the latest weekly reporting period, up almost three cents from the week before, according to the U.S. Energy Information Administration. At the end of August, drivers were paying 21 cents less a gallon, or $2.68.
Analysts blame the recent price increases on temporary shutdowns at refineries in the U.S. and France, as well as on weakness in the dollar in early November, which led to higher oil prices.
They predict the cost of gasoline will stop rising or will fall by the end of the year, but they fear the relatively high prices could dampen the already sluggish pace of economic recovery, as consumers sacrifice a bigger portion of their paychecks to the fuel pump. This is an especially critical factor heading into the holiday shopping season, when many retailers ring up a large portion of their annual sales.
"We will have to see how recent petroleum-price increases factor into consumer confidence and demand moving forward," said John Felmy, chief economist for the American Petroleum Institute, an industry group.
Gasoline prices are still far below the record highs of over $4 a gallon that pinched drivers' wallets in the summer of 2008. Later that year the recession sent prices tanking to below $2 a gallon as unemployment soared and demand for fossil fuels sank.
But prices have recently picked up and are now 10% higher than they were a year ago. Drivers in downtown Houston, where a gallon of unleaded gasoline was selling for around $2.75 on Friday, said the higher prices were forcing them to tighten their belts just as the Christmas shopping season rolls around.