High gasoline price gap: $4 for gasoline in Oregon and Washington state
High gasoline prices have frustrated American drivers for months — and now the war in Ukraine is driving oil and gas costs into a new gear.
On Monday, a gallon of regular gas averaged $3.61 nationally, up 8 cents in one week and 90 cents over the past year. Average gasoline prices recently crossed the $4 mark in Nevada, Oregon and Washington, according to AAA. New York, Illinois, Arizona and Alaska — where gas prices have all risen more than $3.80 — appear to be next.
For people in a few states, $4 gas is old news. Drivers in Hawaii pay an average of $4.57 per gallon, which is just pennies from the state’s all-time high of $4.61, set in 2012. Experts predict that gasoline at 5 $ could be typical in Hawaii by Memorial Day.
In California, gasoline prices hit a new record high last month and continue to climb, averaging $4.84 a gallon on Tuesday. Many gas stations across the state are already charging upwards of $5 a gallon.
Why are gas prices so high?
Gas prices vary widely from state to state due to different taxes and regulations, as well as the local cost of doing business. According to the US Energy Information Administration, 56% of the consumer cost of gasoline is based solely on the wholesale price of crude oil. As you may have heard, supply chain issues and growing demand drove these prices up even before the Russian invasion of Ukraine pushed up global oil prices even further.
“The invasion of Russia and the growing series of financial sanctions imposed by the United States and its allies have sown jitters in the global oil market,” AAA spokesman Andrew Gross said in a statement. Press release.
Patrick De Haan, head of oil analysis at gas price-tracking app GasBuddy, said in a blog post on Monday that the Russian-Ukrainian situation “could escalate at any time, keeping gas prices high for the foreseeable future”.
Other forces unrelated to international tensions and supply chain issues could also drive gas prices higher in the coming months. “We’re also entering the time of year where seasonality pushes gas prices up 25 to 75 cents by Memorial Day,” De Haan explained. “It just looks like a perfect storm for motorists at the pumps, with little to no relief anytime soon.”
Higher costs are likely to spread far beyond gas stations. Diesel fuel now costs an average of $4.10 per gallon, up $1.03 from the same period last year. Since most trucks and cargo ships run on diesel, shipping costs are rising for many businesses and services.
All of this translates into higher inflation for a wide variety of goods, from food to building materials, at a time when inflation is already at its highest level in 40 years.
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