Economic News
U.S. Average Gas Prices Hit Record High Amid War in Ukraine
On February 24th, Russia invaded the neighboring country of Ukraine. In response, nations around the globe have announced sanctions against Russia, with private companies also announcing they were pulling out of the nation. However, one industry that’s heavily involved in the region is oil. Thus, as a result of the conflict, the price per barrel of oil has risen sharply. In turn, Americans are now seeing record high gas prices.
According to GasBuddy, the national average for unleaded gasoline hit $4.104 per gallon. This narrowly topped the previous all-time record of $4.103 per gallon set back in July of 2008. Meanwhile, AAA released similar data, but pegged the average at $4.06. In either case, this is the first time prices have surpassed $4.00 a gallon in more than a decade. As for diesel, while it has yet to break the $4.846 per gallon record, GasBuddy puts the current average at $4.63 a gallon and expects it to set a new high marker within two weeks’ time.
The quick-rising prices also set a record for the largest ever spike observed by GasBuddy. In the past week, the average price has grown 49.1¢ per gallon, edging the 49¢ surge seen in the wake of Hurricane Katrina in 2005. According to AAA’s numbers, the past week saw prices rise 45¢ per gallon, while a $1.30 year over year increase was also observed.
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Commenting on the rapid rise, GasBuddy head of petroleum analysis Patrick De Haan said, “Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious. That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more.” He went on to note that the immediate outlook is no better, explaining, “It’s a dire situation and won’t improve any time soon. The high prices are likely to stick around for not days or weeks, like they did in 2008, but months. GasBuddy now expects the yearly national average to rise to its highest ever recorded.”
Obviously what’s happening to the people of Ukraine is far worse than what Americans are facing. Nevertheless, the high gas prices could certainly impact commuters with less disposable income to spend. While various solutions are being explored, it seems likely that more record highs will be set before any normalization and relief arrives on this front.
