Gasoline prices are soaring to record highs. Why no end in sight

(WJW) – The United States broke a record for the gas price on Monday, rising to $4.104 per gallon, according to GasBuddy.

The highest national price ever recorded on the site for a gallon of gasoline was set on July 17, 2008 at $4.103. Monday, AAA National Average saw a 45 cent increase in one week.

The Associated Press points out that the record gasoline price of 2008 would actually be around $5.24 when inflation is taken into account.

At present, there is no indication of when gasoline prices will peak.

“It’s a house of cards, and I think it’s fallen at this point,” said Lynda Lambert, spokeswoman for AAA Central East.

Lambert said it’s not just the Russian invasion of Ukraine this affects the price at the pump.

Prices were already high and expected to hit $4 by Memorial Day before the Ukraine crisis.

“All trends point to prices continuing to rise,” Lambert shared with WJW.

A gas station in Cleveland Heights, Ohio, sells a gallon of regular unleaded for $4.99 per gallon on March 7, 2022. (WJW)

She explained a few key factors that have kept gasoline prices high.

“We were already running out of gas. During the pandemic, demand got so low that refineries cut production,” she said.

Although supply isn’t where it should be, demand is also growing, Lambert said.

She also said there were ongoing supply chain issues and shortages of delivery drivers. The main cause is the Russian invasion, even though America has not sanctioned Russian oil production.

“The invasion of Russia and the escalating series of financial sanctions by the United States and its allies have given jitters to the global oil market,” said AAA spokesman Andrew Gross.

Oil importers and shippers have issued a “de facto ban” on Russian oil, according to Tom Kloza, chief global analyst for the Petroleum Price Information Service.

This decreases the overall world supply, he said USA today.

It also drives up the price of a barrel of oil.

The price of crude oil is 50-60% of what you pay at the pump.

Other costs that go into the total include state taxes, federal taxes, refining costs, and distribution and marketing.

The federal gasoline tax is 18.3 cents per gallon.

While the US Strategic Petroleum Reserve is the largest emergency oil stockpile in the world, the federal government is unlikely to deplete it to bring down the price of gas.

It can hold up to 714 million barrels of oil.

The United States consumes about 15 to 20 million barrels of oil per day, according to Department of Energy estimates.

The White House released 30 million barrels from the stockpile last week for short-term relief.

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