With the first day of summer fast approaching, many hopeful holidaymakers are considering their options for the season, some excited about their first real opportunity to travel after more than two years of pandemic-induced blockages and restrictions .
But planning that dream trip became much more complicated; between exorbitant air fares, rising holiday rental scams and, of course, the topic that everyone has been thinking about for months: ever-rising petrol prices. This month alone, 28 U.S. states saw record gas prices, with no clear end in sight.
What is the average price of gas in the United States?
According to the AAA, the national average for regular gasoline rose five cents on Wednesday to an all-time high of $ 4.67 a gallon. This means that in the last month alone, average gas prices have risen by 48 cents, and a gas tank now costs 32% more than the day before Russia’s attack on Ukraine.
Illinois has also become the seventh state to join those with an average gasoline price of $ 5 or more, according to AAA, with New York and Arizona just cents from that milestone. Georgia now has the lowest average gas price at $ 4.16 a gallon, and California has the highest at $ 6.19.
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Why is gas so expensive?
As is the case with so many commodities, the price of gasoline is greatly reduced by supply and demand, reflecting not only the cost of acquiring and refining crude oil, but also the cost of distribution, marketing, and taxes. .
Part of the explanation for rising gas prices lies in Russia’s invasion of Ukraine. World leaders pursued economic retaliation against Russia in February, and the impact on crude oil prices was immediate; reached three digits for the first time since 2014. Russia’s loss of supply also increases exports from U.S. and Canadian refineries normally supplied by gas stations in the eastern U.S.
“With the cost of oil accounting for more than half the price of the pump, more expensive oil means more expensive gasoline,” AAA spokesman Andrew Gross said in a statement to NBC News. “These prices are approaching record levels in early March.”
Of course, rising oil prices also contribute to inflation, which rose 8.5% year-on-year in March, its fastest rise in 40 years.
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To what extent will gas prices rise?
A couple of weeks ago, JPMorgan analysts predicted how much gas prices would rise this summer, and estimates were far from optimistic. “With expectations of strong driving demand … the U.S. retail price could rise another 37% in August,” the company’s report said on CNN.
According to Patrick De Haan, an analyst at Gas Buddy, which tracks fuel costs nationwide, the national average gas price could exceed $ 5 a gallon on June 17. Still, others are hesitant to say that the national average will definitely cross. the $ 6 a gallon mark.
“It’s hard to get to $ 6,” Andy Lipow, president of Lipow Oil Associates, told CNN. “Before we get there, we would have a major demand for destruction, not just here, but around the world.”
Experts might be divided, but one thing is for sure: summerers who buy fuel for their summer trips are more than likely to get burned.
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