As of late, Americans have been increasingly feeling pain at the pump due to record high gasoline prices. On Tuesday, March 8th, American gas prices reached an average national price of $4.17 per gallon, shattering the former high of $4.11 in July of 2008 when not accounting for inflation. The price for diesel has not yet surpassed the 2008 record of $4.85, but is readily approaching it. According to the Associated Press, “a barrel of U.S. crude oil cost $119.40 per barrel, and Brent crude, the international standard, cost $123.21 per barrel on [March 7].”
In a historically consistent fashion, California has on average the highest gas prices in the United States at $5.44 per gallon on March 8th. Furthermore, specific regions of the Golden State have boasted even higher gas prices. In the major cities of Los Angeles and San Francisco, some stations are selling gas at prices between $6-7 per gallon.
While California currently boasts the highest gas prices in the nation, the rest of the West Coast is also struggling. Behind California with the greatest gas prices stands Hawaii ($4.71), Nevada ($4.67), Oregon ($4.58), and Washington State ($4.54).
Staggering gas prices are set to cause financial hardship for many families. Some are already adjusting their budgeting and are forced to reduce spending in other areas. Others are turning to driving less frequently in an attempt to reduce gas consumption. Perhaps more importantly than the short-term impact of the swelling prices on families are those of the long term—one Wall Street estimate states that the average American family may spend an additional $2,000 this year due to the increased expenses.
If you are wondering why gasoline prices have risen to this extent, then you are not alone. One factor that has caused the skyrocketing prices is, of course, the coronavirus pandemic. During the early months of the pandemic, Americans stayed at home and thus demand for gas and in turn gas prices dropped significantly. However, once vaccines started rolling out, Americans felt more comfortable re-entering community life and began to drive and travel more frequently. This increase in travel translated to a higher demand for gasoline and therefore increased prices at the pump.
However, the increased demand for crude oil as communities emerged from lockdowns had greater complications for the global oil supply. Due to the decline in demand for these products at the beginning of the pandemic, the Organization of the Petroleum Exporting Countries (OPEC) and major oil-producing nations responded by cutting their production of gas and oil products by 10 million barrels, or 10% of the global supply. Once the world began to slowly recover from the disruptions of the pandemic and demand for gas and oil products began to increase, the oil-producing countries were slow to resume their pre-pandemic production levels. As such, the combination of high demand for gas and a comparatively low supply have contributed to the high prices which Americans see when they fill up their tanks.
Although it did not cause the original increase in gas prices, the Russo-Ukrainian war has exacerbated the severity of the issue. In order to support Ukraine, President Joe Biden announced economic sanctions on Russia which banned American imports of Russian gas and oil products, stripping Russia of its primary source of revenue.
Russian oil and gas accounts for only 10% of American imports of such products, leading the United States to not largely depend on Russia for them. However, the sanctions themselves are influencing the high gas prices domestically. Patrick De Haan, a petroleum analyst, explains, “When the U.S. issues sanctions, that has wide ramifications on the ability of Russia to export oil . . . We don't import a lot, but somebody else does and we are making it difficult for Russian oil to flow to the global market, and prices are reacting to that.”
So what are experts saying to expect when it comes to gas prices in the near future? Well, you should plan on the prices at the pump to remain high in the upcoming weeks and perhaps even months. Bill Adams, chief economist for Comerica Bank, explains, “Inflation will accelerate in March and April as the knock-on effects of the Russia-Ukraine war push prices even higher at supermarkets, gas pumps and on utility bills.”
While the inflation crisis will look to improve after April, it is currently unclear when Americans will begin to see gas prices decrease, especially given the uncertainty surrounding the future of the situation between Russia and Ukraine.
Sources:
Mendoza, Jordan. “Gas prices are the most expensive in US history, breaking record from 2008.” USA Today, 8 Mar. 2022, https://www.usatoday.com/story/money/2022/03/08/gas-most-expensive-us-history/9404939002/. Accessed 13 Mar. 2022.
Picchi, Aimee. “3 reasons why gas prices are so high — and when they might come down.” CBS News, 11 Mar. 2022, https://www.cbsnews.com/news/gas-prices-high-expensive-
come-down-cbs-news-explains/. Accessed 13 Mar. 2022.
About the Author:
Karenna Marnik is a sophomore student. Over the past year, Karenna has developed an interest in journalism, contributing to both The Alcott Youth Magazine and her school’s newspaper. Additionally, she is passionate about sailing, debate club, and participating in student leadership. Karenna also enjoys a lifestyle filled with exercise and the outdoors, particularly hiking and skiing.