Are Gas Prices Rising Because of the War in Ukraine?
Gas prices are spiking at the pump. Is it all because of Russia’s invasion of Ukraine, or is something else to blame?
Written by Andrew Kidd
Reviewed by Kathleen Flear
Rising gas prices are on many
vehicle owners
’ minds, lately. It’s difficult to ignore when the national average price per gallon recently hit $4.33 for regular and is nearly $5 per gallon for premium.Gas prices haven’t been this high since the summer 2008, when the price per gallon peaked at $4.11 before falling off to under $2 per gallon by that December.
What’s causing the rising gas prices?
As
Kelley Blue Book
reports, this current pike in gas prices comes mostly as a result of Russia’s invasion of Ukraine and the subsequent sanctions placed on Russia. While most U.S. fuel at the pump comes from domestic sources, the U.S. imports about 7% of its oil from Russia, placing Russia in third on the import list after Canada and Mexico.
The U.S. House voted to ban Russian oil imports in a bipartisan (and largely symbolic) move on March 9—well after consumers started seeing big increases in their refueling costs. The oil market, much like any other, does not respond well to volatility, especially when military mobilization is involved.
With uncertainty about the litany of sanctions facing Russia, some oil buyers might be “self-sanctioning” as well. In other words, they’re trying to avoid any unnecessary legal entanglements for doing business with Russian companies when they probably shouldn’t have been.
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Is that the only reason prices are skyrocketing?
Not entirely. While Russia’s invasion of Ukraine plays a big role in the pain at the pump, there’s a bit more to it than that. Gas prices normally rise in the spring, which is when oil refineries typically slow production through March and April to perform maintenance in preparation for the busy summer driving season.
And while face masks and vaccinations took preeminence as political talking points of the day, one underlying benefit of the early days of the COVID-19 pandemic was the
plummeting gas prices
many enjoyed due to a slowed global economy. To be fair, it’s not like we had many places to be, but it’s still a stark contrast to what drivers are facing today.A global drop in demand and an unexpected increase in supply caused crude oil prices to collapse in 2020 with subsequent impacts on pricing for refined petroleum products and other downstream items like gasoline.
President Biden can’t take full credit for the spike in gas prices, either. It’s been a common (often partisan) refrain over the course of the past few months that Biden’s policies are solely responsible for the sharp spike in fuel prices.
To see how widespread this misconception is, visit any gas station and look for a very ubiquitous sticker popping up on many a pump.
Of course, there’s been some back and forth between the White House and the oil industry about who’s really to blame. The oil industry asserts Biden’s policies are holding back domestic energy production, while Biden’s administration pointed out the 9,000 unused federal oil drilling permits collecting dust, claiming a lack of oil industry incentive to ramp up production.
Again, oil companies exist to be profitable; they’re not charities.
When will gas prices go down?
Not anytime soon if we keep driving as much as we do. With many companies calling their employees back into their offices following nearly two years of predominantly remote work, the daily commute is returning to its pre-pandemic norm.
Many experts believe prices will get worse before they improve, and the fact that post-pandemic inflation and car insurance rates have jumped isn’t helping.
People are looking to save as much as they can, with the price at the pump influencing new car buyers to
consider going electric
.How can I save money in the meantime?
While you can save money by driving conservatively, choosing an alternative-fuel vehicle or simply driving something that sips gas, Jerry can help with long-term savings on car insurance.
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