Gas prices in the United States continue to rise and break records ahead of Memorial Day weekend, causing concern among residents who are already struggling to afford other necessities.
On Monday, the national average for regular gas hit a fresh record of $4.48 per gallon, an increase of 15 cents in the past week and 40 cents in the last month. Compared to the day before Russia invaded Ukraine, gas prices are now 27% higher.
U.S. Gas Prices
In a statement, the president of Lipow Oil Associates, Andy Lipow, said that everything about the situation was pointing towards the fact that gas prices would go even higher. He anticipated that the U.S. was well on its way to seeing $5 per gallon.
Lipow cited a surge in gasoline futures that caused him to raise his initial forecast of $4.50 to $4.75, suggesting that record-high prices may greet drivers on Memorial Day weekend. He also said that $5 was completely possible, though he said it would change if there were a surprise development in the war in Ukraine or with the coronavirus pandemic, as per CNN.
AAA said that the average was already above $5 per gallon in several states, including California, Washington, Nevada, and Hawaii. The company also noted that Oregon was only a penny away from that average price.
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The surging prices of gas have also raised manufacturing and transportation costs across many U.S. industries. The situation is expected to continue as the country continues to export more gas to Europe to make up for Russia's lack of supplies due to sanctions.
According to Reuters, U.S. natural gas futures have already doubled this year, which is the highest increase seen in retail gasoline and diesel. The situation has caused anger and frustration in the U.S. energy industry and the government.
Continuous Surge
Many industrial company executives have expressed their belief that the United States should stop exporting gas to other countries and prioritize itself first. However, gas producers are pushing for more export capacity along with more permits for drilling.
The day before Russia went to war with Ukraine, the national average of gas was at $3.53, Lipow said. He added that the overriding fear in the market was that the world could not make up for the anticipated loss of Russian oil supplies to various countries. The official noted this fear was driving up oil prices, which accounted for more than half of the pump price.
Just a week ago, California had an average cost at the pump of $5.82, with Hawaii at $5.28 and Nevada at $5.11. Lipow said that the only action the government has left to reduce gasoline and diesel prices in the near term was to suspend the federal excise tax on gasoline and diesel, which comes out to 18 and 24 cents per gallon, respectively.
Lipow also said that the federal government should continue to release crude oil supplies from the Strategic Petroleum Reserve. However, he noted that neither of these actions increases the amount of energy that the world needs to replace the lost supplies from Russia, Fox Business reported.
