The nationwide average price of a gallon of gas today, according to AAA, is $4.95. It’s risen by 4 or 5 cents each day for a week. So, America may cross the unheard-of $5 per gallon threshold by tomorrow morning.
Fifteen states and the District of Columbia already have averages over $5, AAA reports. The nation’s most expensive gas is in California, where a gallon now averages $6.39.
Why Prices Are So High
Tom Kloza, global head of energy analysis for the Oil Price Information Service, told CNN that $6 per gallon is in sight this summer. “Anything goes from June 20 to Labor Day. Come hell or high gas prices, people are going to take vacations,” Kloza said.
Russia’s unprovoked invasion of Ukraine started the cascade. The United States imports very little oil from Russia in a normal year, but the oil market is global. So reduced output from Russia still affects pump prices in the U.S.
“Given the global nature of these markets, it’s virtually impossible for us to insulate ourselves from shocks like the ones that are occurring in Russia that move global oil prices,” Treasury Secretary Janet Yellen told the Senate Finance Committee this week.
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The federal government has tried everything from releasing a million barrels of oil per day from the U.S. Strategic Petroleum Reserve to allowing refiners to use extra ethanol to stretch gasoline supplies (ethanol use is normally limited in the summer to control air pollution).
Yet prices keep rising.
Refiners are actually making less gasoline because other oil products are more profitable this month. “With the market currently really tight both in diesel and jet fuel, we’re actually seeing refineries choose to make less gasoline in favor of those more profitable molecules,” explained Matt Kimmel, a senior research analyst for refining and oil markets at Wood Mackenzie.
Meanwhile, oil companies have no plans to produce more oil. Last week, three major oil companies ended plans to drill in Alaska’s Arctic National Wildlife Refuge.
Oil giants BP, Chevron, Exxon, and Shell have all reported record quarterly profits amid price surges.
What Can Be Done
Experts say the only thing that will reduce pump prices is for Americans to drive less. “At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet,” said Andrew Gross, a spokesperson for AAA.
In the last week of May, Americans bought about 5% less gasoline than they did in the same week a year ago.