Gas prices reach highest average in 7 years as Memorial Day travel surges but supply falls short
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- The average gas price is at its highest since 2014, at $3.04 per gallon on Sunday.
- Labor shortages, increased demand and lingering fallout from a cyberattack on the Colonial Pipeline are impacting the gas market.
- As vaccines roll out, more Americans are planning to travel this summer, many by car.
- See more stories on Insider's business page.
Gas prices reached a seven-year high, at an average of $3.04 per gallon on Sunday, up $1.14 per gallon from the same time last year, according to AAA.
The spike in price comes as more than 37 million Americans are expected to travel this weekend, with 9 out of 10 driving, according to AAA's annual Memorial Day weekend forecast. That's a 60% increase from the same time last year, which was the lowest recorded since AAA started forecasting in 2000.
California has the highest state average at nearly $4.20 per gallon as of May 30th, according to AAA. Texas, Louisiana, and Mississippi have the lowest prices, hovering around $2.71.
Gas prices have slowly been rising from the lows of 2020, when the oil and gas industry was slammed by stay home orders to slow the spread of the coronavirus. With vaccines rolling out, more Americans are traveling again. But production hasn't kept up with demand.
In part, that's due to the fallout of a cyberattack on Colonial Pipeline, the nation's largest fuel pipeline, in early May. Colonial Pipeline supplies 45% of fuel consumed on the East Coast, prompting some residents to panic-buy gasoline during the shutdown.
Colonial restored service a few days after the ransomware attack, but experts warned that it could take weeks for gas supply and prices to return to normal.
Labor shortages, too, are impacting the gas market. During the pandemic, tanker truck drivers were left without work, prompting many to retire. Truck driving schools also closed last year, meaning new drivers weren't being trained.
As much as 25% of tanker trucks are sitting unused due to a shortage of drivers, according to trade group National Tank Truck Carriers.