This is the highest gas price American motorists have seen since July 2008.
The prices at the pump rose long before Russia invaded Ukraine, and have risen faster since then. According to AAA, the U.S. average price for a gallon gasoline has increased by 45 cents per gallon over the past week and reached $4.06 Monday.
Asiya Joseph said, “I am looking into the possibility of walking or biking to work.” She had just paid $4.29 per gallon at a BP station near Brooklyn, New York. “This is my first time filling up my tank in about 10 days.”
Julian Mesa, a Huntington Beach, California cleaner, earns $15 per hour. He paid $92 for his pickup to be filled at $5.79 per gallon on Monday.
Mesa stated, “It is very expensive, high even for those who earn the minimum.” To cut down on their expenses during the pandemic, Mesa’s family had already reduced their consumption of fast food.
Regular gasoline prices broke $4 per gallon Sunday, the first time it has broken that level in almost 14 years. They are now nearly half-off from last year.
According to the European Commission the average price per liter is 1.75 Euros. That’s $7.21 per gallon.
GasBuddy, which tracks prices to the service station level, stated Monday that the U.S. would likely surpass its record price of $4.10 per gallon. However, that doesn’t account for inflation. After inflation, the record price would equal $5.24 in today’s terms.
Patrick De Haan, GasBuddy analyst, said that “Forget about the $4 per gallon mark. The nation will soon set new all time record highs and could push closer towards a national average $4.50.” “We have never been in such a situation, with this much uncertainty.” Americans will feel the effects of the price rise for quite some time.
The worst inflation that Americans have experienced in 40 years is due to energy prices, which far exceeds higher wages. Analysts predict that consumer prices will rise 7.5% this week, compared to a year ago.
Oil prices rose to new highs Monday morning, before falling again. The benchmark U.S. crude oil price surged to $130 per barrel overnight. However, it then dropped to around $119 in the afternoon trading, which was a 3% increase. International crude oil prices shot up to $139, before plummeting to around $123 per barrel. The U.S. stock market plunged with the S&P 500 dropping 3%. This is its largest drop in 16 month.
In early 2020, crude oil prices plunged as economies around the globe shut down due to COVID-19. The price of futures even turned a negative, which meant that some sellers were offering buyers oil. However, prices rebounded as demand recovered faster that producers and inventories dried up.
Yet, few forecasters predicted this week’s spike. The Energy Department had predicted that oil would average $80 per barrel in the past month. This was before Russia invaded Ukraine in February 24.
The United States is the largest oil producer in the world, ahead of Russia and Saudi Arabia. However, it is also the largest oil consumer and cannot meet this huge demand with its domestic crude.
The United States imported 245,000,000 barrels of oil last year from Russia — approximately 8% of all U.S. crude oil imports, up from 198 million in 2020. This is less than what the U.S. imports from Canada and Mexico, but it’s more than it imported from Saudi Arabia last year.
There are calls to stop Russia getting oil and natural gas exports money due to the increasingly violent Russian attack on Ukraine. Russia is heavily dependent upon Europe for its gas.
President Joe Biden is reluctant to ban Russian oil because it could fuel inflation going into the midterm elections in November.
Many Republicans, along with a growing number Democrats in the House, Senate and House, have supported banning Russian crude to increase pressure on Russian President Vladimir Putin to stop the bombardment of Ukraine. A bipartisan group made up of chairmen of various committees reached an agreement Monday to prohibit Russian oil imports and suspend normal trading relations with Russia and Belarus. This could result in steep tariffs for other goods from these two countries.
The White House isn’t ruling out a ban. Secretary of State Antony Blinken stated Sunday that the United States was discussing a ban with its allies “while making certain that there is still an adequate supply of oil” in the world market.
U.S. officials are considering other sources of oil, despite talk of a Russian oil ban. Senior U.S. officials went to Venezuela this weekend for talks about easing sanctions on major oil exporting countries.
Ronnie James, a Brooklyn Uber driver, is asking the government for help to bring down prices. He wants oil from Venezuela and more from the Strategic Petroleum Reserve.
He said, “The people who are each day building the wealth for this nation could use some relief.”
