Daniel Acker | Bloomberg | beautiful pictures
Gasoline prices are surging, with the national average now at its highest level in nearly a decade. Rapid price increases are pinching consumers’ pockets, and experts say there may be little end in sight.
According to data from AAA, the national average for a gallon of conventional gas stood at $3.83 on Friday, the highest level since September 21, 2012. Prices are rising at a rapid rate – the average Friday’s is nearly 11 cents higher than Thursday’s. Americans are paying about 27 cents more per gallon than they were last week and 41 cents more than they were a month ago.
In some places, consumers are paying more. In California, the state average is currently $5.07 per gallon.
Soaring prices have become a headache for President Joe Biden, and the White House has said for months that it is working to combat high prices.
The spike followed the rise in oil prices. West Texas Intermediate Crude OilUS oil benchmark, topping $116 per barrel on Thursday, highest level since 2008. Russia’s invasion of Ukraine and subsequent sanctions on the country’s financial sector are raising concerns about supply shortages in Russia’s already tight pre-war market.
More than 50% of gasoline costs are based on oil prices, according to the US Energy Information Administration. Expenses related to refining, distribution, marketing, and taxes make up the rest of the price of gasoline.
As the saying goes “the cure for high prices is high prices” and experts say demand destruction – in the form of high prices – may be the only thing to quell a spike in oil prices.
Wells Fargo pegs that at $130 per barrel of oil or $4.60 per gallon of gasoline
Patrick De Haan, head of petroleum analysis at GasBuddy, said the national average could hit $4 by the end of this month.
“The loss of Russian oil production or a shortage of them will likely continue to affect us as we approach the peak of the summer driving season,” he said Thursday on CNBC. “The exchange.”
Petroleum contract was about 8% higher on Friday, after rising to its highest level since July 2008 during the session.
