HOUSTON – Petrol prices hit a sharp milestone on Saturday as the national average of regular petrol reached $ 5 a gallon.
Summer gasoline is always more expensive because the demand for fuel increases on Memorial Day weekends. But this year oil and refined fuel prices have risen to levels not seen in 14 years, largely due to the Russian invasion of Ukraine and consequent sanctions and a resurgence of energy use as the economy recovers from the corona virus outbreak.
The national average price of petrol on Saturday was $ 5.00, 60 cents higher than it was a month ago. A year ago, gas sold for $ 3.08. According to the AAA Motor Club. The national average has been at its highest point since March, when it went up Its previous post In July 2008, when the oil traded above $ 133 a barrel. It was more than ten dollars above current levels, not even taking into account inflation. Back then, the national average petrol price was $ 4.11 or $ 5.37 a gallon in today’s dollars.
The average price in all states is over $ 4 per gallon. In California, One of the most expensive states in the country for fuel for a long time, costs more than $ 6 a gallon. Michigan, Delaware, Maryland and Colorado are the states with the most recent increase in petrol prices.
Energy experts estimate that every penny increase in petrol prices will cost Americans an additional $ 4 million a day.
Read more about oil and gas prices
“Strap on for the summer ride,” said Tom Closa, global head for energy analysis at the Oil Price Information Service. “The average consumer is going to pay $ 450 a month for their fuel needs, which is more than $ 100 in 2020 during epidemics.”
The war in Ukraine has had the most direct impact on gas prices, as sanctions on Russia have pulled more than a million barrels of oil from global markets. Energy traders have also been bidding on oil prices in anticipation of further decline in Russian production and exports.
But many other factors have contributed to the rise in prices.
The capacity to refine oil as petrol, diesel and jet fuel is not sufficient. Oil companies have closed a few refineries in recent years, especially during times of epidemics when demand fell. Some new refineries will open or expand next year, which will help.
But for now, analysts say the strong demand for petrol is hampering limited deliveries and raising prices as many waves of the new Covit-19 variant are kept close to home and drivers hit the road. Loosening of severe epidemic locks in China has also pushed up oil prices.
Higher gas prices – with rising costs for other needs such as Food And Shelter – Large The problem for President Biden. Many political experts believe the Democrats will lose the November election because voters are angry and frustrated. High inflation. A Friday report Consumer prices accelerated again in May, rising 8.6 percent year-on-year, the fastest pace in more than 40 years.
Last week, as gas prices approached the $ 5 limit, Biden executives said the president would do so. Travel to Saudi Arabia, One of the world’s largest oil producers, should seek help in a transparent effort to restore diplomatic relations and, most importantly, to reduce energy prices. He encourages domestic producers to pump more oil, even as large oil companies are reluctant to increase their investments significantly and want to return profits to investors through dividends and share repurchases.
In the past, when oil companies produced more oil in response to higher prices, they caused gluttony and reduced their profits.
Mr. பிடன் Is less Influence on gas prices, which are governed by global supply and demand. Experts say that Saudi Arabia is not even in a position to cut prices quickly, as it does not have the capacity to fully offset the expected decline in Russian production. The European Union last month agreed to ban most Russian oil by the end of the year.
In March, Mr. When Biden announced that America Russia bans oil and natural gas, He warned Americans, “defending freedom is costly.” There is some evidence that higher prices are beginning to have an impact on demand. Travel experts say some people choose to drive shorter distances on vacation.
Eventually higher prices at the pump will encourage motorists to switch to electric cars, but buying cars like this will reduce demand in the coming years, not months.
Donald Hertzmark, president of DMP Resources, a Washington-based energy consultancy, said: “It will take some time for price increases to hit demand.
Clifford Cross Report from Houston and Mary Solis Reported from New York.
“Communicator. Music aficionado. Certified bacon trailblazer. Travel advocate. Subtly charming social media fanatic.”