Why do gasoline prices continue to rise when crude oil prices are lower?
Gas stations around the country are experiencing sticker shock due to the ongoing spike in the price of fuel. Apart from the ongoing international conflict, other variables will ensure that gas prices remain at record high levels this year.
Many Americans are currently agitated and anxious about the recent rise in gasoline prices. So, when will the skyrocketing cost of gasoline come to an end? Continue reading to find out more!
When it comes to gas, what’s the going rate right now?
According to the American Automobile Association, the current average price of a gallon of gas throughout the country as of April 2021 was 4.120 USD per gallon, down from the 4.274 USD per gallon it was in March. Prices on the West Coast have reached as high as $5.69 per gallon.
Photo credit: AAA
In just a week, according to AAA data, the national average price of gasoline has risen by over 55 cents per gallon, marking the most extreme increase in petrol prices since the national crisis of 2008. In spite of the certainty of experts, recent data gathered indicates that most Americans won’t experience any form of gas price reduction until the end of the year.
Photo credit: AAA
What’s the deal with the gas price hike?
International warfare isn’t the only factor contributing to the sharp rise in prices. According to GasBuddy’s research and other sources, gas prices are expected to rise. As the year progresses, here’s what we know about recent gas trends and what you can expect to see in the future.
COVID-19 restrictions and measures
Lockdowns during the commencement of the COVID-19 epidemic led to a significant decline in oil demand. Pre-Ukrainian conflict prices were substantially higher because a majority of oil production was halted as a result of the pandemic. Only now is oil output returning to pre-cap levels.
Analysis has shown that demand for gas is on the rise as more COVID-19 restrictions are eased across the country. As the number of new cases of COVID-19 falls in many large cities and heavily packed suburbs, more Americans are ready to get back on the road and resume their travel patterns in time for the next summer season of travel.
Of course, the Russian-Ukrainian situation has done little to alleviate the rising cost of gasoline. The price of oil skyrocketed as soon as conflict broke out, and the market went into overdrive.
The Russian invasion of Ukraine
Russia is one of the major oil exporter across the world. So its invasion of Ukraine, as well as the subsequent political sanctions imposed on Russia, are the primary causes of the recent increase in gas prices. About 8 percent of overall imports in 2021 came from crude oil and other gas products, according to Reuters’ forecasts for the country’s oil importation.
Also important for the U.S. refineries is the type of oil coming out of Russian markets, which is a heavier, sour crude, according to specialists in the gas business. This is necessary for optimum gas production and supply in the United States.
There is also the issue of inflation
Consumer products have risen in price over the past several weeks, and the overall inflation rate in the United States is up 7 percent. It is projected that inflation will continue to affect other consumer-facing commodities (such as gas) in the months to come, given that Wall Street saw its worst fall in over a year this week as markets continued to respond to high prices.
According to BBC News, this trend isn’t confined to petrol costs, as prices for everything from automobiles to groceries are surging at the quickest rate in over four decades.
When can we expect a decrease in the price of gasoline?
National averages could rise well beyond 5 USD per gallon if strains in Ukraine don’t ease soon. Although gas prices are expected to remain above 4 USD till November 2022. Unfortunately, things aren’t looking up any time soon. As in 2008, the high costs are expected to last months rather than days or weeks, making the situation much more terrible.
A record-breaking national average is now expected for the first time in history. So, the misery at the pump will continue for the foreseeable future for consumers.
Gas prices for the rest of the year can’t be predicted with any certainty because there are simply too many fluctuating variables to take into account. As such, it is difficult to know what to expect.
What can you do to cut down your gas bill?
You may save money on your gasoline bill by taking the time to do the simple things right. Check out these hints:
Reduce Your Engine Idling Time
The practice of idling the motor before you begin a journey may be commonplace for you. You’re wasting money, according to the US Department of Energy. In some cases, idling can consume up to a quarter gallon of fuel each hour, depending on the engine size and whether the air conditioner is being used. This amounts to up to three cents of lost fuel per minute in some cases.
Use gas apps to find cheaper gas stations
The cheapest gas rates in your area can be found with gas-saving applications. There are apps like GasBuddy, Waze, and Gas Guru that show the cheapest gas prices right on your phone.
Don’t Go Too Fast
To save money on gas, the federal government’s Fuel Economy Guide recommends reducing your car speed. The guide claims that for every 5 MPH you drive over 60 MPH, your fuel economy drops by 7 percent.
Gas Saver delivers extensive data sets, in-depth research, and insightful commentary on worldwide gas markets. Whatever your driving experience, we’ve got the latest gas-saving tips and trends to help you get the most out of your vehicle. For more information, please visit our website today!