BOSTON and ORLANDO, Fla. -- Independence Day 2018 will see the highest gasoline prices in four years—and record travel.
The national retail average is set to hit $2.90 per gallon around July 4, the highest price for the holiday weekend since 2014, according to Boston-based GasBuddy. Oil prices rose to $73 per barrel June 27, their highest point since 2014, and are likely to pressure gasoline prices after their recent downward trend. This is against a backdrop of rising geopolitical tensions, a surprisingly small increase in production from the Organization of the Petroleum Exporting Countries (OPEC), a large decline in U.S. oil inventories and record-high U.S. petroleum exports.
While the national average will be below the 2018 peak of $2.98 per gallon hit in May, it will still be significantly higher than in 2017. GasBuddy estimates that in the first four days of July, motorists will spend $1.02 billion more on gas than this same period last year.
The higher gasoline prices won’t curb travel for the holiday, however, according to AAA and IHS Markit’s 2018 Independence Day Holiday Travel Forecast. It expects automobile travel to rise 5.1% to 39.7 million travelers, marking its fifth annual increase. This is nearly 2 million more travelers than in 2017. It defines the Independence Day holiday period as July 3 to July 8.
INRIX, a global transportation analytics company that partnered with AAA on the forecast, expects the late afternoon of July 3, to be the busiest travel period, with travel times more than double that of a normal trip in the most congested cities. This includes Los Angeles, New York and Washington, D.C.
AAA, Orlando, Fla., sites the strong economy for the increased travel, as well as Independence Day occurring on a Wednesday, which provides more flexibility in scheduling travel before or after July 4.