Is Gas About to Hit $7 per Gallon Nationwide?

Is Gas About to Hit $7 per Gallon Nationwide?

( – Americans who visit the gas pumps these days might experience painful sticker shock. In many areas of the country, the prices per gallon keep ticking upward, and as of March 8, the national average according to AAA was $4.173. To put this in perspective, last year, the national average was $2.774. In some locales, particularly in blue states like California, Oregon and Washington, the prices are currently nearing $6 per gallon. The dizzying increases are causing many people to ask: how much higher will the costs escalate, and is there any relief in sight?

It’s easy to point the finger at a single issue, but the fact is there are several factors currently affecting today’s prices at the pump.

Tensions in Russia

One of the more recent factors affecting fuel prices is the ongoing tensions between Ukraine and Russia. Multiple countries have hit Russia with crippling sanctions, which has affected its ability to export crude oil to both the EU and the US. While the amount of crude oil we get from Russia doesn’t seem like much, the resulting increases in cost per barrel are what’s most hurting Americans’ wallets.

Additionally, major oil suppliers like Shell and BP have curtailed their business relationships with Russia and Russian oil companies, adding more stress on already high demands. But what about onshore drilling?

Natural Disasters Affect US Production

Natural disasters play a large part in America’s oil production, particularly hurricanes, which severely impact the operation of oil rigs. Last year, Hurricane Ida knocked several drills offline and diminished refining capacity, resulting in a severe decrease in output. In fact, our oil reserves dipped 40% from January to November.

OPEC+ Refusing to Increase Production

Then, there’s the issue of OPEC and OPEC+ refusing requests for increased production. During the height of the COVID-19 pandemic, crude oil demand decreased significantly, causing these organizations to slow production. When people started traveling again and fuel demand increased, OPEC refused to increase production, leading to higher costs per barrel. Even now, they’re not still producing what they were pre-pandemic.

With the ever-present threat of skyrocketing prices, some people have taken to filling up and stockpiling gasoline, anticipating prices again reaching the dreaded levels of 2008 under former President George W. Bush. This artificially-increased demand, on top of an already struggling system, is further driving up prices.

However, the Biden Administration doesn’t seem to have any plan to combat these rising costs. Make matters worse, inflation continues to sit at a startling 7.5%, driving up the costs of food and other consumer goods, so Americans are feeling the pinch everywhere they turn.

Without any real plan to address the issues, it seems possible the reality of $7.00 per gallon isn’t too far off, at least in some areas.

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