Car mechanic Alex Abarca was waiting for his friend to return to his vehicle at the Circle K on Florida Avenue in Denver this week after filling up. The price of regular unleaded gas? $4.22 per gallon.
“It’s just affecting everyone,” he said. “Whether it be people trying to get to their jobs, people taking their kids to school, whatever it may be.”
Many like Abarca are pointing to the war in Iran when it comes to the high gas prices heading into the summer travel season. As of April 28, the average price of gas per gallon in Colorado is $4.13. The national average is $4.18, according to AAA. Around this time last year, Colorado gas prices averaged $3.11.
“There were some complications related to some international conversations,” said Skylar McKinley, spokesperson for AAA. “But it was broadly a normal gas year and $3.10 is historically where you’d expect us to be.”
He said the Middle East conflict has caused supply concerns.
A similar pattern last occurred in 2022 during the Ukrainian War. Gas prices in Colorado reached their highest during that time at $4.92 in June of that year.
“Those concerns have a market impact that results in oil trading higher as gas prices. If you’ve got more expensive oil, you’re going to have more expensive gas prices,” McKinley said.
He noted that gas prices usually spike around May 1 because of the increase of typical summer demands, such as the summer travel season, schools letting out and teenagers traveling to summer jobs.
And McKinley said the highest gas prices are typically between Memorial Day and Labor Day.
“You typically see prices fall from their summer peak around Labor Day. It’s not instantaneous,” he said. “Prices march upward into July and August and then start marching downward into early September, and start to really plummet in the winter. That tracks with demand supply being equal.”
The high energy costs have also affected other sectors of the economy, such as the airline industry.
United Airlines, which lists Denver International Airport as a major hub, responded to the high jet fuel prices by canceling flights in off-peak periods such as redeyes and flights on Tuesdays, Wednesdays and Saturdays during its second and third quarters. The airline has also pulled flights from Tel Aviv and Dubai.
United is also reviewing its summer flight schedule to Chicago O’Hare International Airport after the Federal Aviation Administration issued an order to reduce capacity by more than 300 flights – or about 12% – between May and October.
The Lufthansa Group, which owns Lufthansa Airlines and other European carriers, took a more drastic approach by cutting 20,000 short-haul flights through October.
McKinley said consumers could also see a spike in fuel surcharges. He pointed to food trucks as an example and anticipates more will switch over to electric generators.
“Food trucks run off gas power generators,” McKinley said. “As gas gets more expensive, food trucks will get more expensive, you can expect an inflationary impact of high oil prices on just about everything.”
Fuel surcharges have also spiked parcel shipping costs. Freightwaves.com reported that U.S. ground and express parcel shipping costs are on pace for higher fuel surcharges for a third consecutive record quarter.
Earlier this month, Amazon added a 3.5% fuel surcharge to fees merchants pay when Amazon Logistics ships their products from their warehouses. The U.S Postal Service added an 8% transportation surcharge on parcel products earlier this week.
Driving less is the best solution against high gas prices. Other suggestions include combining errands and carpooling. On the Front Range, particularly in metro Denver, consumers can use public transportation.
McKinley said some travelers forgo jet travel and drive more. But they will opt for cheaper choices like staying in a more modest hotel or go on a shorter vacation.
“In some ways, I would suspect it’s the tale of two economies,” he said. “The folks who have the discretionary income to travel continue to do so in cheaper ways and the folks who never had the discretionary income to travel still don’t and have to deal with high, high prices elsewhere in their family’s budget.”
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