$3 gas coming to a station near you
You’ll soon see regular gas selling for $3 a gallon soon at the pumps. This comes after concerns that President Donald Trump is about to impose new sanctions on Iran and the announcement of him pulling out of the nuclear deal have sent oil prices climbing. This means gas prices will be coming along for the ride.
The national average price is up to $2.81 a gallon according to AAA, an increase of 3 cents in the last week, and 15 cents in the last month. This is the highest prices have been since 2014.
Price Hikes Are Coming
The Oil Price Information Service, which tracks prices for AAA, expects the national average to rise to about $3 a gallon sometime this month.
“Most of this recent increase has to do with speculation that the Trump administration will take a hard line with Iran,” said Tom Kloza, chief oil analyst for OPIS. The president has until May 12 to decide whether the US will stay in a deal with Iran meant to curb its nuclear program, or pull out of the agreement and once again impose sanctions on the country.
That deadline is adding to normal seasonal increases in prices. The month before Memorial Day is historically a period when prices climb as refiners and gas stations prepare for the summer driving season.
About 16% of gas stations nationwide are already charging more than $3 for a gallon of regular. Less than 4% were charging $3 or more on this date a year ago.
Gas is the priciest in the western United States. Every state on the West Coast, as well as Alaska, Hawaii, Idaho, Nevada and Utah, have an average price of over $3 a gallon. Among eastern states, only Pennsylvania has an average price that high.
Four years ago, gas prices reached as high as $3.70 a gallon about this time of that year.
Consumers are searching for ways to save at the pump
Here are some ways you can save at the pump. One way is to use a gas station app or website. GasBuddy, AAA, Fuel Finder, and Gas Guru are among the resources that can help you find lower prices.
Some stations offer a lower price if you pay with cash instead of a credit card. The difference between the cash and credit price usually ranges from around 10 to 15 cents a gallon.
No matter how you pay you can a discount for frequent fuel programs such as Shell’s Fuel Rewards and BP’s partnership with United Airlines.
The most popular option is to pay with a cash back credit card. While the credit card price may be higher than the cash price, the reward you receive could make using the credit card a better deal.
It’s worth noting that a rewards credit card could even provide greater savings than a gas credit card from a big oil company (such as Texaco or Chevron). For example, the Bank of America Cash Rewards Visa card offers 3 percent cash back on gasoline purchases, among other things, up to $2,500. The Sunoco Rewards Credit Card, by contrast, offers only a flat 5 cents per gallon discount, though there is no limit on how much you can spend.
Higher gas prices to erase Trump’s tax cuts
This pain at the pump threatens to drain some of the extra take-home pay that many households are enjoying from Trump’s tax cuts.
Higher gas prices are on track to cost Americans an extra $38 billion in 2018, wiping out about one-third of the direct benefit from the tax law, according to Morgan Stanley. The firm estimated that American households will take home an additional $128 billion in 2018 because of the new tax law.
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