A report released by AAA shows that gas prices increased at the largest rate for July in more than a dozen years and that prices in August are expected to remain relatively flat, but may experience a small monthly increase for the first time since 2009.

AAA today is releasing its first ever end-of-month report on retail gasoline prices and future reports will be released on the last day of every month in a similar format.

The report shows that National average gas prices increased 5.1 percent or 17 cents a gallon over the course of July. This was the first monthly increase since March and the largest increase for the month of July going back to at least 2000, when AAA’s records begin.

“Drivers nationwide saw prices reverse in July after three months of steady declines at the pump,” said Avery Ash, AAA spokesperson. “Higher global oil prices and increased demand for gasoline during the busy summer driving season were the primary factors that sent pump prices higher in July.”

The national average price of gasoline in July was $3.42 a gallon. This was the third-highest average price for July ever recorded. National average gas prices increased 26 days in July after reaching a summertime low of $3.326 a gallon on July 2. Gas prices this July increased faster than in July 2011, when prices increased 4.4 percent or 15.7 cents a gallon. July gas prices have increased during five of the previous ten years.

National average gas prices increased 26 days in July after reaching a summertime low of $3.326 a gallon on July 2. The main factors influencing retail gasoline in July included rising crude and ethanol prices, geopolitical concerns in the Middle East and mixed economic news surrounding the global economy.

Even though the report shows bad news, AAA says gas prices are expected to stay relatively flat through Labor Day and may begin to fall afterward.

Gas prices in August historically have declined seven out of the previous ten years. Nevertheless, AAA predicts that gas prices for August likely will remain relatively flat or may even experience a small increase for the first time since 2009. Gas prices should begin to fall soon after Labor Day as the summer driving season ends, gas demand declines and refineries transition to less expensive fuel blends.  

“Drivers will continue to face high pump prices in the weeks ahead as the summer draws to a close,” said Avery Ash, AAA spokesperson. “Relief fortunately may be around the corner as we expect gas prices to drop this fall.”

Market developments that could alter the August forecast include news indicating a strengthening or worsening of the global economy; U.S. unemployment data; European sovereign debt-developments; the Atlantic hurricane season; and geopolitical events in the Middle East, among others.