Unsettled debate on how the nation should handle its debt may have an immediate, and unfavorable, impact on what Americans pay at the gas pump.
"If no agreement is made, and we default, then the value of the dollar will weaken and increase the appeal of crude oil as a commodity to foreign investors — ultimately driving up retail gas prices," said Jessica Brady, spokeswoman for AAA Auto Club South.
Brady said a weakened U.S. dollar, coupled with European agreements to resolve the debt crisis and bailout Greece, helped drive oil prices higher last week. Crude oil closed on July 22, at $99.87 a barrel on the New York Mercantile Exchange ($2.38 more than the week prior), as optimism among investors continued that the U.S. economy will begin to pick up.
Bloomberg.com's Stock Market & Financial Markets Overview indicates that the price of crude oil has risen nearly 10 percent (or about $9 per barrel) on the NYMEX over the past few weeks, yielding similar price spikes on retail gasoline.
The average price for a gallon of regular unleaded gas rose over the past month 11 cents nationwide, and 23 cents in Georgia and metro Atlanta, according to AAA's Daily Fuel Gauge Report published Monday. The state has the highest average prices in the Southeast region, and is counted among states like Massachusetts and Oregon, with some of the highest gasoline prices in the country.
Monday's report revealed the average cost for regular unleaded gas was $3.73 per gallon in Georgia. In contrast, Georgia's neighbor to the north and east, South Carolina, averaged $3.51 per gallon. To the west, in Alabama, gas prices averaged $3.59.
"Consumers can expect to see retail gas prices increase further this week, and it's likely this increase will continue into August," said Brady.
"We are definitely going to see ebbs and flows in the oil market for the remainder of the summer, with gas prices in continual fluctuation," she continued. "As hurricane season starts to heat up, with various storms forming, it's likely oil prices will remain volatile on that factor alone."