Gas prices reached an all-time high this week, with the national average price nearly 50 percent higher than it was one year ago.
According to AAA, the national average price for a gallon of regular unleaded hit $4.374 on Tuesday. This marked an increase of 17 cents in the past week alone and 4 cents in just one day. The group reports that gas prices are now 47.4 percent higher than they were one year ago, when the national average registered just $2.967 per gallon.
Drivers in California are being particularly hard hit, with the highest average price per gallon there registering at $5.841. Some counties in the state saw their average price exceeding $6 per gallon.
It is not just gas that is getting more expensive, however. Diesel fuel also hit a new high on Tuesday at $5.550 per gallon in bad news for an economy that depends on diesel-fueled trucks hauling goods throughout the country.
President Joe Biden’s recent moves to stem the crisis have done little to help. For example, he recently moved to release a million barrels of oil a day for the next six months from the country’s Strategic Petroleum Reserve. Last month, he announced that the Environmental Protection Agency would start allowing gas to be sold that contains a 15 percent ethanol blend. He has also called on Congress to charge companies fees on idled oil wells as well as non-producing acres of federal lands in hopes of incentivizing new production.
None of these moves seem to be having the desired effect, however, and many experts believe the trend will continue for quite some time.
The head of petroleum analysis at GasBuddy, Patrick De Haan, said: “Liquid fuels have turned into liquid gold, with prices for gasoline and diesel spiraling out of control with little power to harness them as the imbalance between supply and demand globally continues to widen with each passing day.”
Russia’s invasion of Ukraine isn’t helping matters, according to De Haan, who added: “Russia’s oil increasingly remains out of the market, crimping supply while demand rebounds ahead of the summer driving season.”
Furthermore, he explained that if we note an above-average hurricane season this year, it could cripple refinery capacity at a crucial time, making matters worse.
The high prices come as the European Union continues to move toward instituting oil sanctions on Russia. It also comes alongside record-high inflation. In March, the Consumer Price Index reached 8.5 percent.
While the Biden administration does its best to pin the problem on Russia, many believe the administration’s energy policies deserve most of the blame. For example, Biden has blocked the completion of the Keystone XL pipeline and restricted drilling on federal lands, both of which are causing a supply shortage in the market. He also placed a moratorium on drilling on federal lands, but it was blocked after more than a dozen Republican attorneys general sued.
Just how much are all these economic missteps by the Biden administration costing Americans? The average household is expected to pay nearly $2,000 more for gas in 2022 as a result of rising oil costs, Yardeni Research reports. At the same time, the average household is spending $1,000 or more on food thanks to rising grocery prices, leaving households with $3,000 less to spend on other consumer goods and services – whose prices are also rising amid inflation that shows no signs of slowing down any time soon.
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