$5/gallon not out of the question as Las Vegas gas prices skyrocket

Gasoline prices in Nevada continue to spike as the Las Vegas Valley set new all-time highs in each of the last four days.

As of Monday morning, the average cost of regular unleaded gas in Las Vegas was $4.60 per gallon, setting a new record, according to AAA. Gas prices in the Las Vegas Valley have jumped 60 cents in the past week.

Last week, Patrick De Haan, lead fuel petroleum analyst with fuel-savings app GasBuddy, said Las Vegas would likely top out at around $4.75 per gallon, but with the significant jump in prices over the weekend, a $5 per gallon price isn’t out of the question.

“It’s quickly becoming more possible as an average for Vegas,” De Haan said Monday during a Facebook Live chat.

Nevada’s statewide average also set a new record Monday at $4.59 per gallon, as did Reno with a $4.79 average price.

The national average was listed at $4.06 per gallon Monday by AAA, 5 cents off the all-time high. The average broke $4 per gallon across the United States on Sunday for the first time since 2008.

Drivers shocked by prices

Las Vegans filling their gas tanks Monday said they were stunned to see record gas prices reminiscent of the late 2000s.

“It’s just shocking,” Las Vegas resident Dawn Slezak said. “I can’t believe how much it costs now. I think you (now) try to group everything or try to go to one side of town, at least, all in the same shot.”

Slezak said she normally pays about $40 to fill her personal vehicle once every two weeks. Monday’s fuel-up was about $60.

At the Costco Business Center on Martin Luther King Jr. Boulevard on Monday, the wholesale-priced gas caused staff to redirect the line of cars around the warehouse instead of its usual roadway. Gas there was $4.04 per unleaded gallon.

Ina Carpenter, of Las Vegas, said she drove from the east side of the valley to get gas at the wholesaler, where she usually refuels. She said she was shocked by the wait for more affordable gas, but thought it was the right trade-off for her compact SUV.

“Now it’ll definitely be at Costco because I’m not paying $5 to pump gas,” Carpenter said. “That’s crazy. Thirty or 10 cents (discounted) is not so much, but almost a buck is a big difference. Who doesn’t want to save four quarters?”

Spike tied to invasion

As he did last week, De Haan said the spike seen across the U.S. is mainly tied to Russia’s invasion of Ukraine.

“Now that prices have really jumped up it may be more like 90 percent of the recent increase here over the last week is because of Russia,” De Haan said. “Ten percent may be due to the switch over from winter to summer (grade) gasoline.”

Oil prices have soared on worries that Russia’s invasion of Ukraine will upend already tight supplies. Russia is one of the world’s largest energy producers, and oil prices were already high before the attack because the global economy is demanding more fuel following its coronavirus-caused shutdown.

On Monday, a barrel of U.S. crude oil settled at $119.40 per barrel, up 3.2 percent, after earlier touching $130.50.

De Haan said it’s possible some relief for consumers could be on the horizon, but noted the situation is ever-changing.

“Gas price increases will likely continue at least through the first part of this week,” De Haan said. “We could see them start slowing down by the end of this week.”

Trickle-down effect

With the Las Vegas Valley a heavy commuter city, the high gas prices could have a trickle-down effect on the spending habits of locals, according to Mark Vitner, senior economist at Wells Fargo.

“Most folks drive to work and they drive some fairly long distances and those who work in the leisure and hospitality industry spend a relatively high proportion of their income on commuting to and from work,” Vitner said. “They will have less money to spend on everything else.”

With a larger proportion of their paychecks going to gasoline, Southern Nevada residents may opt to spend less while shopping and choose to go out to dinner or out for entertainment less frequently, Vitner said.

Las Vegas resident Keaton Johns said he commutes four days a week from northwest Las Vegas to the Strip for his job and changing driving habits isn’t an option.

“I can’t really change or deter it,” Johns said, while getting gas at a Shell station near Durango Drive and Elkhorn Road. “You just gotta grin and bear it.”

The spike in oil prices is also affecting the cost of jet fuel. According to CNBC, the price of jet fuel has risen more than 50 percent so far this year, reaching its highest level in more than 13 years.

Although the airline industry may feel the squeeze of high jet fuel prices, Vitner doesn’t see airlines pushing that on to customers just yet. He also doesn’t think the high prices of gasoline and jet fuel will impact travel volume too much in the near term.

He does, however, think the escalating prices could make visitors to Las Vegas stingier with how much they spend when they arrive.

“When you go to Las Vegas, you’re going there for pleasure,” Vitner said. “And if you spend more money to get there, you have less money to spend when you get there.”

Contact Mick Akers at makers@reviewjournal.com or 702-387-2920. Follow @mickakers on Twitter. McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on Twitter. Review-Journal staff photographer Kevin Cannon and The Associated Press contributed to this report.