Over the past three weeks, the average price of a gallon of gasoline in the United States rose to a wallet-busting $2.55 a gallon. Monday's weekly gas price survey from the Energy Information Administration shows the largest weekly jump in the average price of a gallon of gas in the history of the report.
Where are gas prices now?
On average, gasoline prices have increased more than 60 percent in the last two years and cost an average of $0.67 more a gallon than just a year ago. However, the price of gas still remains below the all-time high of $3.12 a gallon (adjusted for inflation) last seen in March 1981.
Where are gasoline prices going?
While it is unlikely we are going to experience a major drop in gas prices anytime soon, we should see a little reprieve after Labor Day when summer travelers get off the highways, reducing the demand for gasoline.
How did we get here?
The high price of gasoline can be linked to several things:
Increased demand (some of which is related to summer travel)
Concerns about the scarcity of oil -- Crude oil accounts for about one-half of the price of producing gasoline
Refinery issues (specifically, since July 20, there have been 14 outages of one kind or another)
Tensions with Iran (as the world's fourth-largest crude oil producer, Iran is at risk for sanctions from the United Nations should it move forward with its nuclear program)
High demand in China and India
Turmoil in the Middle East
Is there anything you can do about it?
Follow these simple guidelines to save money at the pump:
Efficiency is everything. It may seem obvious, but getting lost at more than $2.55 a gallon is no longer just lost time but lost money as well! Know where you are going and ask for directions!
Pass on the premium: Premium, high-octane fuels aren't necessarily better for your car and can cost significantly more than regular fuel. In fact, such premium fuels don't provide any greater fuel efficiency and many cars are designed to use regular low-octane fuel. According to AAA, premium gas accounts for about 20 percent of total gasoline sales in this country, despite the fact fewer than 10 percent of cars on the road were designed to burn the higher-octane fuel.
Slow down. Gas mileage decreases rapidly above 60 mph, and if you drive 70 mph instead of 55 mph, you could lose up to 17 percent of your car's fuel economy (i.e., how many miles a vehicle actually drives using a given amount of gas on either the highway and in the city). In fact, each 5 mph you drive over 60 is equal to paying an additional 10 cents per gallon of gas. To maintain the speed limit and save gas, try using cruise control (if you have it) or just stick to the limit.
Keep your tires filled. Bald tires are not only a driving hazard, but they burn more fuel. Keeping your tires properly inflated is an easy way to improve your gas mileage up to 3 percent, which is a savings of 5 cents per gallon.
Keep your car properly tuned. Keeping your car in good condition can significantly impact your gas mileage as a poorly tuned engine burns more gas. Be sure to check and replace the air filter regularly, which can provide a fuel economy benefit of up to 10 percent which equals approximately 15 cents per gallon.
Empty your trunk. For every 100 pounds of excess weight in your trunk, your car loses 1 percent of fuel economy.
How much does gas cost in Europe?
It is safe to say that a gallon of gas costs more than $5 in Western Europe. (As of May 2005, a gallon of gas averaged about $5.51 in France and $6.36 in the Netherlands.) The reason for the high cost? European countries impose high taxes on fuel in an effort to fund public transportation as well as encourage conservation and fuel-efficient technologies. In fact, the taxes on gas are more than double the underlying cost of the gas in England, the Netherlands and Scandinavia.
Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is Good Morning America's personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributed to this report.