Gas Prices Soar to Record Highs, Clobbering Restaurant Industry

Gas prices are rising at an alarming rate, defying historical trends. Typically, gas prices fall in late August and September as people settle into their autumn routines after the busy summer travel season ends. However, this year is different, with the average price of a gallon of gas increasing over the past month to $4.37 nationally, up 7.3% from last month and 37% compared to the same time last year.

The price of diesel has hit a record high at $6.31 per gallon, which is 70% higher than it was a year ago. This surge in gas prices is not only affecting consumers but also the restaurant industry, with consumer sentiment falling 7.5% in September and an equal-weighted index of 35 restaurant stocks down 11.6% over the past month.

The high cost of oil, which has risen 71% so far this year, is driving much of the recent price hike, fueled by fears about supply due to a pipeline shutdown in Saudi Arabia amid ongoing conflict in the Middle East. Independent analysts do not expect relief anytime soon, with traders on the prediction market Kalshi estimating there's a 71% chance of prices exceeding $4.60 per gallon before the end of the year.

Patrick De Haan, head of petroleum analysis for GasBuddy, expects price relief is 'unlikely,' citing ongoing geopolitical tensions and attacks on Russian oil refineries. Motorists should brace for continued volatility ahead, he warns.