Current gas prices have beat a record from 2008.
Lets take a look into why.
Why are gas prices so high?
We are all paying about $1.40 more per gallon now than we were at this time last year. Gas prices have increased dramatically since the Russian invasion of Ukraine. Click here to read more.
It is typical for gas prices to rise in the spring. This is because refineries undergo maintenance before the summer driving season. The situation in Ukraine is exacerbating the problem.
It’s not just gas prices
The price of gas is influenced greatly by the cost of crude oil. This is because gas is refined from the crude oil. The price of Brent crude oil reached $139.13 a barrel, an international benchmark.
To compare, Brent crude oil was only $74 a barrel in December of 2021.
President Joe Biden is expected to announce a ban on Russian oil imports.
The last time Brent crude reached levels this high was $147.50 in July of 2008. That led to gas prices peaking at $4.11 a gallon. Adjusting those rates to the inflated 2022 rates would put us around $5.21 a gallon.
If crude oil spikes that high again, seeing gas for $6.50- $7 per gallon may not be unheard of.
What is our relationship with Russia and can Biden help?
Russia is one of the world’s largest producers of crude and natural gas. They provide roughly 30% of the European Union’s crude oil supply and about 40% of its gas.
The United States is the largest producer of crude and natural gases. But, it is also the largest consumer. We produce over 18.6 million barrels a day but use over 20.5 million.
Russia is our third largest source for crude oil and petroleum outside of Canada and Mexico.
Canada is the only place so far to ban crude oil from Russia. Biden is expected to place a ban as well, and other European countries will likely follow.
Some legislators are proposing a gas tax “holiday” to help lower prices for now, but that could have consequences too.