A buyer refuels at a Chevron gasoline station with costs above $4 a gallon in Seattle, Washington, U.S., on Monday, March 7, 2022.
David Ryder | Bloomberg | Getty Images
Gasoline costs surged to the very best degree on file Tuesday as oil holds regular above $100 a barrel, contributing to inflationary pressures throughout the economic system.
The nationwide common for a daily gallon of gasoline hit an all-time excessive of $4.374 on Tuesday, in accordance with AAA. The value just isn’t adjusted for inflation.
Prices have been rising at a quick clip, with the ascent accelerating after Russia invaded Ukraine, sending power markets reeling.
The nationwide common crossed above $4 in March for the primary time since 2008, and has remained above ever since.
Consumers at the moment are paying $1.41 extra on the pump than final yr.
In some locations, the transfer is way extra excessive. In California, as an illustration, the state common now stands at $5.84. A handful of counties within the state have topped $6.
Diesel costs, meantime, are additionally surging. The nationwide common hit $5.55 per gallon on Tuesday, additionally a file. Prices have hit a brand new excessive for no less than the previous seven days.
West Texas Intermediate crude futures, the U.S. oil benchmark, traded round $101.66 per barrel Tuesday. That’s considerably off its current excessive round $130 per barrel in March.
But whereas oil accounts for greater than 50% of the fee per a gallon of gasoline, it is not the one issue. The business is grappling with the identical pressures enjoying out in the remainder of the economic system, together with labor constraints.
Refiners, which flip oil into on a regular basis merchandise together with gasoline and jet gasoline, are working close to most capability. The U.S. refining capability has declined over the previous few years, and now Europe is competing for a similar petroleum merchandise because it seeks to maneuver away from Russian power.
Andy Lipow, president of Lipow Oil Associates, forecasts costs for normal gasoline rising one other 15 to twenty cents over the following two weeks, in the end hitting $4.50 per gallon.