US gasoline pump prices rose the most in more than a year and are climbing back toward the highest levels of 2023, threatening to complicate the fight against inflation.
(Bloomberg) — US gasoline pump prices rose the most in more than a year and are climbing back toward the highest levels of 2023, threatening to complicate the fight against inflation.
Average fuel costs rose 4 cents to $3.636 a gallon on Monday, the biggest gain since June 2022 and just 5 cents shy of this year’s peak in April, according to auto club AAA. The jump came after one of the largest US refineries — Exxon Mobil Corp.’s site in Baton Rouge, Louisiana — suffered a disruption that may partially shut it down for weeks.
The increase chips away at the cheaper gasoline Americans have enjoyed so far this summer, a contrast to the record prices last year that added to the fastest inflation in four decades and prompted President Joe Biden to release unprecedented volumes of emergency oil reserves. The country currently has only a thin buffer against further supply disruptions, with US gasoline stockpiles at the lowest seasonal level since 2015.
The trajectory of gasoline prices could boost that component of the consumer price index rise by 6% to 7% on a seasonally adjusted basis in August, according to Omair Sharif, president at Inflation Insights LLC. The gain could make the Fed “cautious about easing up on rate hikes,” Sharif said in a note.
New Yorkers have so far been spared the worst of the increases, with the state ranking 15th in fuel costs, down from one of the top spots it typically occupies, AAA data show. The region has been importing large volumes of European gasoline in the past two months, and the biggest East Coast refinery recently restarted its gasoline unit. Both factors helped replenish regional fuel inventories to higher levels than a year ago, though stockpiles are still historically low.
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