AP

Q&A: Forecasters say gasoline prices likely to remain high

Mar 8, 2022, 1:46 PM | Updated: 2:40 pm

DALLAS (AP) —

Gasoline prices have smashed a 2008 record and are likely to head even higher, further fueling inflation and hitting consumers and businesses that are still coming to grips with the pandemic.

The national average topped $4.17 a gallon on Tuesday, according to auto club AAA, and several states on each coast could soon join California in the $5-and-up club.

Prices at the pump have been rising for more than a year, and analysts expect further increases after President Joe Biden announced that the United States will ban imports of Russian oil to punish Russia more severely for invading Ukraine.

As painful as this week’s prices are, they are still not the highest that Americans have paid when you consider inflation. In today’s dollars, that 2008 record of $4.10 a gallon would be equal to about $5.24.

A look at how we got here, and what it means for American households:

WHEN DID PRICES START RISING?

After averaging $2.69 a gallon in 2019, U.S. gasoline prices collapsed as COVID-19 forced offices and businesses to close in early 2020. By late April 2020, a gallon sold for under $1.90. Prices have mostly risen since then, as demand for energy rebounded, global production failed to keep pace, and inventories shrank.

WHY ARE PRICES SO HIGH?

It boils down to supply and demand. The world consumes nearly 100 million barrels of oil a day on average. Producers cut spending on exploration and production during the pandemic, and they have been slow to ramp back up. Some producers say they face labor and parts shortages.

The benchmark price for U.S. oil was around $125 a barrel in afternoon trading Tuesday, while the international standard, Brent crude, was above $130. Of course, consumers didn’t mind when crude was below $20 at the start of the pandemic.

“Oil companies don’t set the market prices; people do, by filling up their tanks,” says Patrick De Haan, petroleum analyst for GasBuddy, which tracks gasoline prices around the U.S.

HOW MUCH IS DUE TO RUSSIA’S WAR?

Analysts say that nearly the entire rise of the last week — about 55 cents a gallon nationwide, on average — can be linked to anticipation that eventually western countries would ban Russian crude, further shrinking their already tight supplies.

“The U.S. doesn’t need Russian oil per se, but the world and particularly Europe are dependent on it,” says Tom Kloza, an analyst for the Oil Price Information Service.

According to government figures, the U.S. imported 245 million barrels of oil from Russia last year, or 8% of all U.S. oil imports. That is less than the United States imported from Canada or Mexico but more than it took from Saudi Arabia.

WHEN WILL PRICES EASE?

Normally fuel prices rise in spring and summer, as Americans drive and fly more. Demand could also get a boost as countries continue to shed their COVID-19 restrictions. Those trends suggest that pump prices are heading higher, with demand continuing to outstrip supply.

“It’s not going to be a good summer for motorists,” De Haan says.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Several hundred students and pro-Palestinian supporters rally at the intersection of Grove and Coll...

Associated Press

Pro-Palestinian protests sweep US college campuses following mass arrests at Columbia

Columbia canceled in-person classes, dozens of protesters were arrested at New York University and Yale, and the gates to Harvard Yard were closed to the public Monday.

2 days ago

Ban on sleeping outdoors under consideration in Supreme Court...

Associated Press

With homelessness on the rise, the Supreme Court weighs bans on sleeping outdoors

The Supreme Court is wrestling with major questions about the growing issue of homelessness as it considers a ban on sleeping outdoors.

2 days ago

Arizona judge declares mistrial in case of rancher who shot migrant...

Associated Press

Arizona judge declares mistrial in the case of a rancher accused of fatally shooting a migrant

An Arizona judge declared a mistrial in the case of rancher accused of killing a Mexican man on his property near the U.S.-Mexico border.

2 days ago

Donald Trump appears in court for opening statements in his criminal trial for allegedly covering u...

Associated Press

Trump tried to ‘corrupt’ the 2016 election, prosecutor alleges as hush money trial gets underway

Donald Trump's criminal trial in New York over alleged hush money payments started with opening statements on Monday.

2 days ago

This satellite image from Planet Labs PBC shows Iran's nuclear site in Isfahan, Iran, April 4, 2024...

Associated Press

Israel, Iran play down apparent Israeli strike. The muted responses could calm tensions — for now

Israel and Iran are both playing down an apparent Israeli airstrike near a major air base and nuclear site in central Iran.

5 days ago

Speaker of the House Mike Johnson, R-La., talks to reporters just after lawmakers pushed a $95 bill...

Associated Press

Ukraine, Israel aid advances in rare House vote as Democrats help Republicans push it forward

The House pushed ahead Friday on a foreign aid package of $95 billion for Ukraine, Israel, Taiwan and other sources of humanitarian support.

5 days ago

Sponsored Articles

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

Q&A: Forecasters say gasoline prices likely to remain high