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Market Daily

Despite Fuel Price Increase, Many Still Take to the Road

Millions to take the road despite increasing petrol prices
Millions to take the road despite increasing petrol prices

Fuel prices have been a major concern through the years as it steadily climbed at a ridiculous rate; but recently, the prices have soared to new heights, breaking records in the United States.

Although many Americans have felt a strain on their wallets amid economic uncertainties, millions of motorists have taken to the roads as the onset of summer is right around the corner. Despite the average cost of gasoline breaking $4.60 for the first time, more than 35 million were expected to take to the roads over Memorial day weekend, often the green light for America’s summer driving season, according to motoring group, AAA.

The number of people on the road led to a 5% increase on last year’s numbers when holidaymakers indulged in the post-pandemic freedom. Tom Kloza, global head of energy analysis at Oil Price Information Service noted that the weekend would see a significant number of people take to the roads.

“I think it’s all systems go this weekend,” he said. “There’s an attitude among the public where it’s like: ‘I deserve this’.”

The early summer rush may have people anticipating the wind in their hair, but high prices have started to take their toll on motorists. Although there is a willingness to splurge on holidays, people may be forced to cut back on day-to-day spending for commuting and social travel.

“We’re starting to see that term ‘demand destruction’ return,” said Kloza.

For the past two years, petrol prices have climbed at a rapid pace as the reopening of the US economy pushed demand to outpace supply. The Russian’s invasion in February shook crude markets, accelerating the rise in fuel cost.

The average national price of a gallon at $4.61 shows that the prices have increased by more than 50% since last year. In California, the price has even surpassed $6 a gallon. Despite the increase, diesel is even more expensive.

The price hike has forced American drivers to rethink their car usage. The average family burns through 90 gallons of petrol a month, translating to an outlay of $414 at current prices.

The rising fuel costs have also fed into rampant economy-wide inflation, creating serious problems for President Joe Biden, who has become the scapegoat for the hike by voters despite limited abilities in influencing them.

Opinions expressed by Market Daily contributors are their own.