Gas prices are at 8-year high. Here’s why

If you think it’s been awhile since the price at the pump has been this high, you’re right.

“We haven’t seen prices this high since September of 2014, so it’s been awhile, and I think it definitely gets people’s attention,” said Shawn Steward, manager of public and government affairs for AAA South Dakota.

At the start of this week, the average price per gallon in Sioux Falls was $3.18, up 10 cents in the past week and 19 cents from one month ago.

Nationally, the price was $3.38 per gallon, up 6 cents in the past week.

“And the pump price has gone up every day in the past 27 days,” Steward said.

Statewide, South Dakota’s average price per gallon was $3.28. One year ago? Try $2.11 per gallon.

“It’s a little bit of a shock, especially when you compare it to that,” Steward said.

What’s happening

The main driver of the recent increase is the price of crude oil, which accounts for 50 percent to 60 percent of gas prices, Steward said. That recently spiked to $85 per barrel after being at about $60 per barrel in August.

“As those crude oil prices rise, so too do the prices we see at the gas pumps,” Steward said. “And we’ve been seeing a pretty robust demand for gasoline and a fairly tight supply.”

The spike started after OPEC oil cartel partners decided against an oil production increase, which would have brought more supply to the market and likely lowered prices, he said.

The increase is not typical of this season, when gas prices generally fall as kids go back to school and vacation season winds down.

“It’s just so murky right now,” Steward said. “There’s also opportunities for hurricanes to impact production facilities in the Gulf and those kinds of things, and we’ll have to watch where demand goes. If prices get too much higher, that may impact people’s decisions to travel.”

Tips to save

AAA South Dakota offers advice if you’re trying to watch your pennies at the pump:

• Make sure your car is tuned up and air filters are clean.
• Properly inflate your tires.
• Stick to the speed limit and avoid fast, jackrabbit starts.
• Use more expensive premium gasoline only if your vehicle specifically requires it. Otherwise, less expensive regular 87 octane unleaded is fine for most cars. Be sure to check your owner’s manual.
• Take advantage of gas discounts, sometimes offered by fuel retailers and grocery store chains.