During the past few months, gas prices in the U.S. have been steadily increasing. This causes consumers to brace themselves for the financial impact.
The spike in gas prices can be attributed to a variety of factors, including the increase in demand as more people travel due to the easing of COVID-19 restrictions, as well as the temporary shutdown of refineries during the Texas winter storm.
As consumers continue to navigate the economic impact of the pandemic, the increase in gas prices is an additional burden that many are trying to manage.
This article explores the reasons behind the surge in gas prices and its effects on consumers.
National Gas Price Average
The national average gas price increased 11.3 cents from a week ago to $3.39 per gallon on Sunday, marking the fourth consecutive week that gas prices have increased. Diesel is now averaging $4.60 per gallon across the U.S.
West Texas Intermediate crude oil increased by 47 cents to $82.11 per barrel, and Brent crude increased by 76 cents to $88.39 per barrel as the oil markets continued to rise. Refinery utilization increased by 1.2 percentage points to 85.3 percent, but it is still expected to face pressure in the coming weeks as turnarounds get underway.
A little behind GasBuddy’s prediction of 8.14 million barrels implied gasoline demand increased by 496,000 barrels per day to 8.05 million.
As a result of Suncor’s outage in the Rockies, demand for U.S. retail gasoline declined 1.4 percent last week, according to GasBuddy demand statistics driven by its Pay with GasBuddy card.
The average gas price in the U.S. was $3.19 a gallon, unchanged from the previous week, and was followed by prices of $3.39, $3.29, and $3.49. It is around 7 cents more than the median price of $3.32 per gallon, which is up 13 cents from the previous week.
The country’s top 10 percent of gas stations charge an average of $4.23 per gallon, while the worst 10 percent charge an average of $2.93. Hawaii ($4.87), California ($4.36), and Washington ($3.90) have the highest average prices.
Global Causes of Gas Price Hike
The rise in gas prices is the result of macroeconomic reasons, such as rising Chinese demand and the cessation of crude oil releases from the Strategic Petroleum Reserve. Because consumers will have less spare income to spend on other products and services as a result of the high costs, this could have an effect on the U.S. economy.
The Projected Duration of Increasing Gas Prices
How long gas prices will climb in escalation is a question that has no obvious answer. Experts predict that drivers in the U.S. shouldn’t anticipate price drops any time soon as long as oil prices remain around $80 per barrel.
“There appears to be little good news on the gas price front, with prices unlikely to turn around anytime soon,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
According to GasBuddy’s annual price projection for 2023, prices could experience even greater increases later in the year. In June, the average gallon of petrol is expected to cost between $3.79 and $4.19.
These growing prices can have an impact on the American economy, which will leave consumers with less spare income to spend on other goods and services.
Conclusion
Consumers have been advised to make necessary adjustments to their budgets and find alternative means of transportation to reduce their reliance on gasoline. The government must make long-term investments in renewable energy sources and continue to promote the use of electric cars to reduce our dependence on fossil fuels.
While the future of gas prices remains uncertain, it is evident that this issue requires immediate attention and action to minimize its impact on consumers and the economy at large.
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