When holiday travel is over, the typical American household will have spent about $4,155 filling up this year, a record. That is 8.4 percent of what the median family takes in, the highest share since 1981.
Gas averaged more than $3.50 a gallon this year, another unfortunate record. And next year isn’t likely to bring relief.
Prices are high, despite slow economic growth and comparatively weak demand.
“In 1981, when the economy was sliding into recession and oil prices were high because of Middle East turmoil, gas ate up 8.8 percent of the typical family budget,” says Fred Rozell of the Oil Price Information Service.
Over the past decade, gas has taken up 5.7 percent of the family budget. If families had spent only 5.7 percent this year, they would have saved $1,300.
For this year, gas should average $3.53 per gallon. That’s 76 cents more than last year. It’s 29 cents per gallon more than 2008, when gas last set an annual record, $3.24. That year, the price of oil hit a record in the summer but collapsed when the financial crisis struck in the fall.
High gas prices can take a toll on consumer confidence. People are more aware of small changes in gas prices because they drive past the signs all the time.
James Hamilton, an economics professor at the University of California, San Diego, who studies energy prices, estimates that high gasoline prices reduced economic growth by about 0.5 percent for the year — a substantial hit for an economy only growing at an annual rate of about 2 percent.
Still, it could be worse. At least the U.S. economy is more fuel-efficient than it was during the oil spikes of the late 1970s and early 1980s. In 1980, for every $1,000 of economic output, 1.07 barrels of oil were consumed. By 2010, it took half that — 0.53 barrels, says Judith Dwarkin, chief energy economist at ITG Investment Research.
Today, the percentage of households using heating oil has fallen and vehicles are less thirsty than ever, far more fuel-efficient than they were in 1980.
Nevertheless, relief from high gas prices is nowhere in sight. Ed Morse, head of commodities research at Citibank, expects oil to average $100 per barrel next year, which would eclipse 2011′s average of about $95 per barrel.
Tom Kloza, chief oil analyst at OPIS, expects gasoline prices to approach $4 per gallon again next spring.
Compared with the year before, American gas consumption has been down every week for more than nine months, according to MasterCard SpendingPulse, a spending survey.
The Associated Press contributed to this story.
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