Report: Gas Costs Still Rising – Is There an End in Sight?

According to the most recent AAA statistics, the price of a gallon of standard gasoline in the U.S. set a new high on Monday, with a gallon costing an average of $4.865 (not adjusted for inflation). California currently has the highest average price – $6.34 –  but ten states have already crossed the $5 barrier.

When Americans hit the roads and highways for Memorial Day vacation travel last week, the rising prices had a significant impact. AAA Spokesperson Andrew Gross weighed in, stating, “People are still fueling up, despite these high prices. At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.”

What more is there to understand about these continuous gas cost increases, and when will we start to see relief at the pump? Get more details in the full article here: 

So, exactly where is gas the priciest? Regardless of how you slice it, consumers are paying much more than they were used to paying not too long ago, and it’s becoming a problem nationwide. According to AAA, no state’s average is less than $4.28. The West, Midwest, and Northeast are seeing some of the highest gas prices in the country.

As of June 6th, the costliest gas averages can be found as such: $5.40 per gallon in Washington State$5.41 in Oregon$5.47 in Hawaii, $5.49 in Nevada, and $6.34 per gallon in California. The average cost in the District of Columbia is $5.06. The highest recent price hikes have occurred in areas like Michigan, Illinois, and Indiana, where petrol prices increased by more than 40 cents over just one week. Another nine states, including Pennsylvania ($4.95) and Massachusetts ($4.96), appear to be on the verge of passing the $5 mark as well.

What is the proper response? Are ideas being bounced around offices in search of a solution? Well, officials may already be doing their best to combat the issue. Oil and gas businesses are striving to increase output. Consumer Energy Alliance President David Holt, whose organization’s members include several oil and gas businesses, called for a rise in U.S. oil and gas output in reaction to the current jump.

There are several factors involved in this. Russia, for example, is one of the world’s top oil exporters. It sent roughly 8 million barrels of oil and other petroleum products to worldwide markets in December, including 5 million barrels of crude oil. And only a small portion of it was sent to the U.S. 

Europe received 60% of the oil, while China received 20%. However, because oil is valued on global commodity markets, the loss of Russian oil impacts prices all around the world, regardless of where it is consumed. Western governments initially exempted Russian oil and natural gas from the sanctions they imposed in response to the invasion due to worries about disrupting global markets. 

However, in March, the U.S. put a formal ban on all Russian energy imports. Last week, the EU placed an embargo on Russian oil imports by ship, which accounted for around two-thirds of the oil bought by European countries from Russia. Essentially, Russia’s oil is gradually being phased out of global markets. 

China also plays a part. The rise in viral cases and severe lockdown measures in most of the country have helped keep oil prices in control. But this has a significant impact on oil demand. The lockdowns in large cities like Shanghai are being removed as the pandemic-related spike begins to fade. More demand without more supply will only lead to price increases.

Not only is oil output falling short of pre-pandemic levels, but refining capacity in the U.S. is also declining. Approximately 1 million fewer barrels of oil are available each day to be converted into gasoline, diesel, jet fuel, and other petroleum-based goods today. Some refineries are even being forced to move from oil to lower-carbon renewable fuels due to state and federal environmental regulations. 

Some firms are retiring aging refineries rather than investing the money needed to retool them as a means to keep them running, especially with big new refineries planned to open in Asia, the Middle East, and Africa in 2023. Diesel and jet fuel costs have risen significantly faster than gasoline prices, indicating that refiners are transferring more output to those products. With European oil and gasoline prices even higher than in the U.S., Canadian and American oil companies have expanded oil and gasoline shipments to the continent. This has also subsequently curtailed its availability in the U.S. Oh, and have you noticed all these “fuel surcharges”? Cheers to a brighter tomorrow.