News: Fuel Prices May Pinch Your Summer Travel Budget

As of April 25, 2022, a gallon of regular unleaded fuel has reached a national average of $4.12, up from just $2.89 a year ago. This $1.23-per-gallon spike has a few key causes, including the following:

• Overall demand for gasoline,  as the COVID-19 pandemic wanes and travel demand surges

• War in Ukraine leading to an embargo on Russian oil imports. 

While this will certainly impact your monthly budget when considering your daily commute and errands, it can also impact your spring and summer travel plans.

Let’s look at how it can impact these plans, the future of fuel prices and ways to save. 

How fuel prices are impacting spring and summer travel plans

Airfare is generally a large portion of any vacation cost, but sudden fuel spikes actually have a minimal immediate impact on airline prices. The reason is that airlines hedge fuel costs by purchasing fuel for their planes ahead of time. Jet fuel has yet to exceed 2008’s record-high prices, despite gasoline setting new price records regularly. 

However, continued rising oil costs can cause future jet fuel price increases, which may affect late-summer airfare costs.

Plus, with gasoline averaging over $4 per gallon nationwide and $5 in some states, the thought of a road trip is quickly falling out of favor as an alternative to potentially higher airfare costs. 

Rising fuel prices can also have a behind-the-scenes ripple effect that impacts everything from your hotel stay to your meals while on vacation. 

Hotel staff must commute to work, causing them to spend money on gasoline, which could push hotels to pay staff more and increase the cost of their rooms. Plus, many hotels run shuttles to airports, and these shuttles run on diesel or gasoline. With these shuttles sometimes running every 15 minutes, this is a constant expense that can drive up room prices. 

Restaurants rely on deliveries from larger hubs, and these hubs will use diesel- and gasoline-fueled trucks to make these deliveries. As fuel surcharges increase, restaurants will pass this added expense on to consumers. 

Then, there’s your budget. With your fuel budget now about 43% higher than it was, you may have to dip into or trim your vacation savings to make ends meet. If you commute 40 miles per workday in a car that gets an average of 25 miles per gallon, you will spend, on average, $142.83 per month on gasoline just getting to work and back five days a week. 

A year ago, that cost would have been just $100.19 per month, and this isn’t counting any errands you run during the day. Unless you run a monthly budget surplus, that $42.64 per month will need to come from somewhere else in your budget. 

What the future holds for fuel prices

According to Patrick De Haan, gas analyst for GasBuddy, “It’s not going to be a good summer for motorists.” While fuel prices stabilize and start to drop from the March 11 nationwide average high of $4.33 per gallon, the fall is generally slower than the rise. The gas stations have already purchased the gas you’re pumping at a higher price, so they must sell it higher to avoid losing cash. 

Even if the supply and demand issues flatten out soon, the chances of seeing $2.89-per-gallon gasoline prices in time for your summer and spring travel plans are low. 

You can save money on travel despite high fuel prices

Gas prices are sure to pinch everyone’s budget this travel season, but there are ways you can save on fuel and travel to help offset the overall higher vacation prices. 

Rewards cards

Using a rewards credit card earns you points toward discounted travel or other bonuses, like gift cards, to offset other aspects of your travel. For example, if you earn $100 in restaurant gift cards using rewards points, you can use that to dine out cheaper during your vacation. 

Gas station credit cards

Many gas stations have their own credit cards. Often, these credit cards not only offer reward points for fuel savings but also, the station offers small per-gallon discounts in the 3- to 5-cents-per-gallon range. Some even offer introductory bonuses good for 25 cents off per gallon or more. 

Fuel-savings clubs

There is an array of clubs you can join to help you save cash on fuel. For example, Gasbuddy helps you find the lowest gasoline prices in the area and also offers rewards for buying fuel and other items. 

There’s also GetUpside, which shows you the lowest prices in the area. Plus, it offers special per-gallon discounts at participating gas stations and cashback for using the app. 

Various fuel companies also offer money-savings apps, including Mobil, RaceTrac and Shell. 

Travel wisely

Travel is again a part of life with the COVID-19 pandemic waning and travel restrictions loosening. While spiking gasoline costs aren’t helping matters, you can travel on a budget with careful planning and execution.