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Gas prices at record levels for Labor Day weekend

Severe drought in much of the country will add about 5 cents to the price of gas as corn prices rise, affecting the cost of the ethanol blended into fuel.)Danny Johnston/Associated Press

Gasoline prices in Massachusetts and nationwide are the highest ever heading into Labor Day weekend, causing some drivers to rethink travel plans for the end-of-summer holiday.

A gallon of regular unleaded gas in Massachusetts averaged $3.73 a gallon at the beginning of the week, up 12 cents from a year ago and a record price for this time of the year, according to the Automobile Association of America. With Hurricane Issac forcing oil rigs and refineries along the Gulf coast to shut down, prices have continued to rise.

The average national price for regular unleaded rose more than 2 cents a gallon on Wednesday alone to $3.83, according to AAA.


“People who were thinking of taking a number of day trips over Labor Day may think twice,” said AAA Southern New England spokeswoman Mary Maguire.

AAA is still expecting 33 million Americans to travel 50 miles or more from home this weekend, up 2.9 percent from last year. But rising gas prices are leading some families to stay put for the long weekend.

Estuardo Maldonado, of Lynn, said he downsized from a truck to a gray Toyota Matrix last year in order to cut back on his gas expenses. He now pays about $40 a week for fuel, down from $50 to $60 when he drove the truck. Even so, his family still limits its driving.

“Every time we want to go somewhere, we have to plan because of the gas prices,” the 34-year-old father of two said. This Labor Day weekend, he added, “We’re not going nowhere.”

Fuel prices have risen steadily in recent weeks as tensions between Iran and Israel have risen, causing worries about the stability of crude oil supplies coming out of the Middle East, analysts said. Hurricane Isaac has compounded that anxiety: More than 90 percent of oil production in the US Gulf of Mexico was shut Tuesday, according to the government.


Crude accounts for about 65 percent of cost of a gallon of gasoline. Crude closed in New York at $94.62, down 87 cents from Wednesday, but still up about $10 a barrel from the beginning of July.

The drought affecting nearly two-thirds of the country has also contributed to the rise in fuel prices, driving up the price of corn, which is used to make the ethanol blended into gasoline. IHS Global Insight estimates that higher corn prices will add about a nickel to gas prices.

Chris G. Christopher Jr., an economist at the Lexington forecasting firm, said consumers should get a reprieve as people reduce travel now that summer is over and fuel suppliers switch to a cheaper winter blend, causing fuel prices to drop off. Still, several factors could delay that relief.

Christopher said fuel prices could spike if Hurricane Isaac does a lot of damage or a conflict breaks out in the Middle East. That would be another blow to struggling US consumers, whose spending accounts for more than two-thirds of US economic activity, and the sputtering recovery.

“This is is the last thing we need [because] the economy is a lot weaker than it was at the beginning of the year,” Christopher said. “So everyone just has to cross their fingers and hope that everything settles.”

Many local drivers say they have resigned themselves to the higher prices. Dave Camillo of Avon stopped to gas up his black Suzuki motorcycle at a Sunoco on Massachusetts Avenue in Boston earlier this week, where a gallon of regular unleaded was going for nearly $3.90. Such a high price frustrated Camillo, who said he spends about $80 a week on gas for his motorcycle and his truck.


“You’re definitely getting used to paying this much,” Camillo said, “but you’re definitely [also] staying closer to home.”

Dorchester resident Ricky Crichlow said he spends about $200 a month to fill up his white Cadillac Escalade — but no longer blinks at the expense.

“As long as it doesn’t hit $5 like it was going to do before,” said Crichlow, 44, “I can live with it.”

Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.