Gas prices: What could you pay for fuel this 4th of July weekend
What is happening
Gasoline prices have continued to decline since hitting an all-time average high of $5.02 in mid-June
why is it important
Gasoline prices are still $1.69 higher per gallon than just a year ago, and many motorists are feeling the pinch.
Gasoline prices continued to fall in the United States for the second consecutive week. On Saturday, the national average for a gallon of unleaded was $4.82, according to AAA. That’s nearly 9 cents lower than a week ago and 20 cents lower than the all-time high of $5.02 a gallon, which was hit the week of June 13.
This is partly due to a drop in demand: While total national gasoline inventories increased by 2.6 trillion barrels to 221.6 trillion barrels, Americans are using about 8.9 million barrels of gasoline. gasoline per day, compared to 9.11 million at the end of June 2021.
This imbalance means motorists will likely continue to see relief at the pump, AAA said.
To get things going, Leaf through lowered the price of unleaded 88 to $3.99 per gallon through the end of July 4 at its more than 650 locations in Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina. The Mid-Atlantic convenience store chain is also slashing the price of E85 gasoline to $3.49, though the high-ethanol blend isn’t compatible with all vehicles.
Here’s what you need to know about gas prices, including how high they could go, what the White House is doing to turn the tide and how you can save money when you fill up. For more ways to get more money in your pocket, here areand .
Which states have seen the biggest drop in gasoline prices?
Between June 23 and June 30, AAA reportedthe states with the largest drop in gasoline prices were Wisconsin (−14 cents), Delaware (−14 cents), Indiana (−13 cents), Florida (−13 cents), Ohio (−13 cents), Arizona (−12 cents). cents), Texas (−12 cents), Michigan (−12 cents), South Carolina (−11 cents) and Maryland (−11 cents).
South Carolina actually has the second cheapest gas in the country, after Georgia, averaging $4.36 per gallon unleaded.
It should be noted that none of these states one month fuel tax exemptionwhich will lower gasoline prices by 25.3 cents per gallon, will not take effect until October 1.during this period. florida
You can see the average price of gas in all 50 states and the District of Columbia on the AAA gas prices website
Why is gas so expensive?
Russia continues add almost 25 cents at the price of a gallon of gasoline.is an obvious factor. The price of gas is inextricably linked to the cost of crude oil, from which it is refined. Each $10 increase in the price of a barrel of crude
According to the White House, the war pushed gasoline prices up more than $1.70 a gallon.
Although the United States does not import a lot of crude from Russia, oil is traded on a global market and any changes affect prices all over the world.
Crude oil prices could hit $150 a barrel by fall, Reported foreign policy. And, according to new data from the Energy Information Administration, total domestic gasoline supply is falling: in the week of July 13, it fell 700,000 barrels to 217.5 trillion.
But the Russian invasion is not the only factor: even though demand is approaching pre-pandemic levels, producers are still reluctant to increase production. In April, OPEC has missed its production increase target of 2.7 million barrels per day.
“We’ve had an imbalance between supply and demand for some time,” Troy Vincent, senior market analyst at energy analytics firm DTN, told CNET. “And he will remain, whether this conflict goes away or not.”
President Joe Biden has also accused oil companies of profiting from the crisis.
“In the midst of a war that has driven gasoline prices more than $1.70 a gallon, historically high refinery profit margins are compounding that pain,” Biden wrote in a June 15 letter to executives. from Exxon Mobil, Chevron, Shell, Phillips 66, BP and other companies. .
“I understand that many factors contributed to the business decisions to reduce refining capacity, which took place before I took office,” he added. “But in wartime, well above normal refinery profit margins passed directly to American families are not acceptable.”
Additionally, during the summer months, gasoline is reformulated to prevent excessive evaporation caused by higher outside temperatures. The most expensive summer gasoline blend can add between 7 and 10 cents per gallon.
How high could gas prices go?
The week of June 13, gasoline averaged $5.02 per gallon – a record high in dollars but, inflation adjusted, still below the 2008 peak of $4.14, which would be around $5.37 now. Yet experts don’t believe we’ve seen the end of rising gasoline prices.
Analysts predict pump prices will rise again. According to University of Houston economist Ed Hirs, the national average will be will likely hit $6 a gallon by Labor Day.
Natasha Kaneva, head of commodities research at JPMorgan, is even more pessimistic: in a May report, Kaneva said the price could climb to $6.20 a gallon as early as August, Reported insider.
What is the government doing to lower the price of gasoline?
In June, President Biden approved a nationwide three-month gas tax waiver. Individually, Connecticut, Maryland, New York, Florida and Georgiaand at least 20 other states are considering similar moves.
In the June 15 letter, Biden called on oil companies to work with his administration to address any production cuts as well as “inventory, price and refining capacity issues.”
He previously criticized them for sitting on more than 12 million acres of federal land approved for drilling and 9,000 production permits. The administration has indicated that it wants the oil companies pay fines to leave unused leases.
In April, the Environmental Protection Agency E15 gasoline year-round sales approved, a cheaper, high-ethanol fuel. The impact will be modest, as only about 2,500 of the country’s more than 100,000 gas stations sell the mixture.
In March, the White House began releasing one million barrels of oil per day from the US Strategic Petroleum Reserve. The unprecedented pullback, which is expected to last six months, could lower gasoline prices between 10 and 35 cents per gallon.
“It will bring the price of oil down a bit and encourage more demand. But it’s still a band-aid on a significant supply shortfall,” said Scott Sheffield, chief executive of Texas-based oil company Pioneer Natural Resources. told the New York Times.
The United States is also considering obtaining energy products from other sources: the Biden administration has been improve diplomatic relations with Venezuelawhich has been banned from selling oil to the United States since 2018 and is negotiating another nuclear non-proliferation treaty with Iran that could bring Iranian oil back to market.
How can drivers save at the pumps?
Drivers can cut back on non-essential trips and shop around for the best price, even crossing state lines if it’s convenient for them.
Apps likefind the best gas prices in your area. Others, like , track your car’s gas mileage and can help determine if it’s getting decent fuel economy. Additionally, many gas station chains have loyalty programs and that offer cash back on gas purchases.
DTN’s Vincent advises against gas hoarding or other extreme measures, but encourages more budgeting for gas. High energy prices have been a major contributor to inflation for some time, he said, and are not going away immediately.
“When the cost of crude goes up, pump prices tend to reflect that very quickly,” he said. “But gas prices tend to linger longer, even when crude drops.”