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Should I Be Worried Gas Prices Are Going to Artificially Increase Over the Thanksgiving Holiday?

Not as much as you should be scared of global unrest driving them up naturally

If the modern automobile had a status on Facebook, it would undoubtedly be “It’s complicated.” With their computer-controlled fuel-injection systems, continuously variable transmissions and three-phase four-pole AC induction motors, the days when every Tom, Dick or Harry could wrench on their ride seem long gone. So let us help — especially with the seemingly mundane stuff that if not done properly, your dad and/or his favorite mechanic vowed would ruin your car forever. Because when it comes to cars — and this column — no question is too dumb.

I’m driving the kiddos down to see their grandma this Thanksgiving, and I’m a little terrified the gas prices are going to spike the very day we hit the road. Should I be worried?
Last week, in California, the price for a gallon of regular-unleaded was, on average, $3.96. A month ago, it was even higher, about $4.08. This week, according to AAA, that same gallon of regular was down to $3.86.

No doubt, those numbers are still pretty scary for anyone living in the state with the most cars per capita in the country. But despite what many people assume is a given — that gas prices will spike during the busy holiday season — the numbers are clearly trending down, not up.

Fact is, the myth that the purveyors of petrol conspire to hike up prices just when people are getting in their cars to see their families is just that — a myth. It’s not supported by any of the data, which has shown that, compared to a regular weekend, “week-over-week retail prices are no more likely to increase during the week immediately before a holiday.” 

Admittedly, though, that’s from a study done by a petroleum industry analytics company, Kent Group, Ltd. So what about less biased data?

Looking at the three-year trend, you can see that there were years when gas prices increased around the winter holidays, and years when prices decreased. A glass-half-empty kind of person might say, “See, sometimes they do hike the prices up.” A glass-half-full person would say, “Actually, prices go down just as much.”

The truth is, both are right — and wrong. That’s because what we spend on a gallon of gas over a holiday weekend has far less to do with Big Oil wanting to stick it to consumers just as they’re about to pile into their cars, and far more to do with underlying wholesale prices for a barrel of crude oil — like when some global catastrophe sends them into the stratosphere, or when increased production drives prices down. It’s just basic supply and demand, baby!

Now, I know that sounds crazy given that a tank of gas seems to have tripled since the early 2010s, but it really hasn’t. In fact, prices are the same now, nationally on average, as they were a decade ago, and less if you consider the cost of inflation:

So when you get in your car to drive over every hill-and-dale to grandma’s, don’t worry too much about how much the holidays are going to cost you at the pump. Be far more concerned about Saudi Arabia’s brutal military intervention in Yemen, and the counterattacks on Saudi oil fields by Houthi rebels and their Iranian allies. Because that’s what would really send crude prices soaring — not an order from OPEC to cynically capitalize on all those miles you’re gonna clock over the next month to see family.