© Reuters. FILE PHOTO: The price of gasoline is shown on a gas pump at an Arco gas station in San Diego
(Reuters) – Americans planning summer travel can expect to pay more at the pump, with gasoline prices potentially reaching $3.50 a gallon as people who have been stuck indoors due to the coronavirus pandemic take to the road.
Motorists taking weekend trips have already helped boost U.S. gasoline demand, which is now at 9.1 million barrels per day, the highest since last August, according to the Energy Information Administration.
Other factors contributing to expected higher prices include limited refining capacity due to weather-related issues in Texas earlier this year. There is also a shortage of qualified tank truck drivers to deliver gasoline to stations, CNN reported, citing National Tank Truck Carriers.
“We still have bottlenecks when it comes to getting gasoline into your tank,” said John LaForge, who runs Wells Fargo (NYSE:)’s Real Asset Strategy unit. “So, at this stage, yeah, I think this summer could get interesting.”
Prices could get as high as $3.50 in July and August from an average $2.80 at the end of April, said LaForge, who expects consumers to absorb the cost.
“If we get to that herd immunity, I don’t think $3.50 for gasoline is going to stop anyone,” he said.
“That’s why you can probably see higher prices into the summer, because for the last year, a lot of people have not been driving… and people want to get out, so they’ll absorb it.”
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