As gas prices are expected to hit a record high ahead of the Memorial Day weekend and summer season, an energy economist argued that Americans have “accepted” the costs amid demand for more travel.
“This summer is going to be very interesting,” C3 Solutions VP of Public Policy and The Heritage Foundation’s Nick Loris told “Cavuto: Coast to Coast” Thursday.
“A lot of families have been frustrated by the pandemic, have had to cancel vacations over the past two years, and therefore, they have been willing to, so far, accept higher prices.”
On Thursday, the national average of one gallon of gas was $4.60, according to AAA. Last year it was priced at $3.03 — $1.57 less. as Americans continue to feel the pain at the pump with record gas prices.
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However, Loris continued to say that families may be reaching their “tipping point” with the gas price surge, suggesting it’s possible they may “change their minds” or “take smaller trips” due to high costs.
Meanwhile, JPMorgan announced last week in a research note that the average national retail price for a gallon of regular gasoline is projected to surpass $6 by the end of the summer.
“That is a rude wake-up call,” Loris stressed. “As the report mentioned, any increase in gas prices results in a reduction in non-gasoline spending…this has ripple effects throughout the economy that’s going to hurt businesses and families all over the country.”
Loris predicts that Americans will continue to accept these gas prices for the majority of the summer until gas prices rise to either $5 or $5.50 per gallon.
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“That’s where I think you really might see Americans start to change their minds about what they do,” the energy economist said.
“But again, I mean, I just bought a flight to Ireland. I paid a lot more than I wanted to, but I haven’t traveled internationally for vacation [in] the last two years, and I was willing to accept the higher prices…I think a lot of American families are.”