Many Texans hit the road for the Fourth of July – AAA projected that 3.1 million Texans would travel by car for the holiday weekend – or are looking to travel before summer’s end. But will soaring gas prices, at an average of $4.42 per gallon in Texas, prompt travelers to consider staying closer to home?
Matt Smith, lead oil analyst for the Americas at Kpler, shared his outlook for gas prices and summer travel, saying:
– Though there are signs of demand destruction – plunging demand amid rising prices – for gas, since the price of oil is what’s driving prices at the pump, we’re not necessarily seeing prices pull back.
– Despite higher gas prices, people have been willing to travel by car at higher rates than last year as the country emerges from the COVID pandemic, though still shy of 2019 levels. “I think that people are really just somewhat fed up [and] are just willing to put some normalcy into their lives and just pay a little bit extra to take that road trip,” he said. AAA projected that across the U.S., 48 million people would drive 50 miles or more over the holiday weekend.
– Prices are likely to remain elevated, around $4.40 per gallon in Texas, as long as sanctions remain in place against Russia, one of the world’s leading suppliers and producers of crude oil, amid its war with Ukraine.
– A federal gas tax holiday, which President Joe Biden has mentioned as a possibility, would make an incremental difference, knocking off 18.4 cents per gallon. Economists have said that could backfire on the economy.