A gallon of gas costs an average of $3.75 nationwide, while prices in Tennessee are about 20 cents lower. The state average is 8 cents more expensive than one week ago and 14 cents more expensive than one year ago, according AAA spokeswoman Jessica Brady.
“There are lots domestic and international issues pushing prices higher in the Southeast,” Brady said, pointing to the recent explosion at a refinery in Venezuela.
Additional price increases could take place once damages are assessed from Hurricane Isaac, she said.
“We will have a better idea of how long and just how high prices could go once workers are able to get back on these platforms and refineries to see if there are any damages, or if any repairs need to be made,” she said. “Whether the platforms will be able to begin production, or there are delays, we can expect prices to go up throughout the Labor Day holiday.”
During the past 55 days, the national average has risen 42 cents from the summer low of $3.33 a gallon, leaving some consumers in states like California paying more than $4 at the pump.
For eight consecutive days, the national average price has set a new all time record for the calendar day, according to the Daily Fuel Gauge Report released Monday.
This isn’t the first time gasoline prices have jumped because of a hurricane. In 2008, prices in mid-September temporarily moved higher as Hurricane Ike drove the national average 20 cents up.
Gas prices in 2008 and 2011 – the respective second and third highest prices each day during this streak – moved lower from Labor Day through Christmas.
Prices during the post-hurricane spike in 2008 could potentially be higher than the daily prices this year during the same time period, which would break the ever-rising current streak. However, any leveling out of prices would likely be brief, according to the report.
The recent developments could mean the 2012 daily price is likely to set new all time highs heading into the fall.
Prior to being classified as a hurricane, gasoline prices began to edge up as traders closely monitored the progress of Tropical Storm Isaac.
But concerns quickly gave way to demand worries, and the week ended with prices slightly lower.
Over the weekend, things turned worse and gasoline spot prices rose sharply following announcements that several refineries in eastern Louisiana and Mississippi planned to temporarily close in advance of the storm.
In response to the closures, market prices jumped in expectation of decreased supplies.
“As of Monday afternoon, four major refineries, totaling more than one-million barrels per day of refining capacity, have announced their planned closure,” Michael Green said in the report. “These refineries make up about half of the production capacity in the region, where Hurricane Isaac is expected to make landfall.”
Hurricane Isaac is also expected to impact offshore crude production in the region.
However, with refineries responsible for the bulk of crude oil demand, being offline will continue to push oil prices lower, as was the case on Monday.
Also pressuring prices lower was continued bearish economic news and reports that the President Barack Obama and his administration were again considering tapping the Strategic Petroleum Reserve in the wake of the storm.
Despite higher gas prices, as well as the sluggish economy and recent weather-related factors, experts predict Labor Day travel will not be dramatically affected, especially given the recent gains in consumer confidence.
“It’s possible, and it is likely, there will be some people who forego travel plans because of gas prices,” Brady said. “But we don’t think it will have an impact in terms of traveling.”
Even so, prices may impact how much travelers are willing to spend while on vacation.
“They’re not going to cancel their plans, but it may affect how often they can eat out or go shopping,” she said.
In fact, AAA projects 33 million Americans will journey 50 miles or more from home during the Labor Day holiday weekend, a 2.9 percent increase from the 32.1 million people who traveled last year.
The total number of holiday travelers is expected to reach a new post-recession high, which would be the third increase this year, according to experts.
“In the absence of strong economic growth that might fuel a significant boost in travel volume, it is an encouraging sign that Americans continue to prioritize travel,” said Bill Sutherland, vice president of AAA Travel Services. “Travel is still within America’s discretionary spending budget.”