The Inflation of Gas Prices


The last time gas prices were at an all time high was in 2008. Gas prices currently are beating these records dramatically. Credit: Micov, CC BY 3.0, via Wikimedia Commons

Over the past few years, our economic condition has been much different than it was. With covid-19 and now the war between Russia and Ukraine, gas prices have been hitting an all-time high.

The US has been facing the highest cost of gas ever, with even all-time highs being beaten on a day-to-day basis. On March 9th, the national average of gas stood at $4.25 per gallon, and now on March 11th, only two days later, the average is $4.331. This may not seem like a big difference to those who don’t know much about gas and pricing, but this is a huge increase compared to what the US was seeing even just a week ago. According to the AAA, when looking at average gas prices for regular gas the current average sits at $4.331 while a week ago it was at $3.837 and a year ago at $2.826. These are big differences and affect everyone in the US, even if you don’t need them for your car. And the increases are even more different if you live in a state where the gas prices were high, to begin with, such as California, where the price of gas has increased to $5.67 per gallon. 

So why is this all happening in the first place? The United States is considered to be an ally or at least has friendly relations with Ukraine, the country which is currently in a war with Russia. Any physical or military action taken by the US against Russia will lead to a global war, so in an attempt to help Ukraine, President Biden has decided to attack Russia by stunting their economy.  

“Today, I am announcing the United States is targeting the main artery of Russia’s economy,” the president said. “We’re banning all imports of Russian oil and gas energy. That means Russian oil will no longer be accepted in U.S. ports, and the American people will deal another powerful blow to Putin’s war machine.”

Russia’s main revenue source comes from this oil and gas export, and by restricting these Russian materials the United States can hurt the economic condition of Russia. But this restriction is also harmful to the economy of the Americans.

Everyone needs transportation and most cars, buses, etc. need gas to operate with the exception of electric cars. But less than 1% of the 250 million cars in the US are electric, which means that everyone else driving a car (or other gas-operated vehicles) does have to pay for gas. 

On average, a car can hold around 13.5 gallons of gas, and considering the price of gas, this would mean that a person would have to pay close to $60 just to fill their car up with a full tank. It varies from person to person but most people tend to fill their gas tank fully around twice a month. That’s already $120 a month just for gas and with the way prices have been increasing this price is sure to go up as well. For those who have to travel long distances often and for those who have below-average annual incomes, $120 a month can be a lot of money. 

This increase in gas prices doesn’t just increase the price of driving but also leads to increases in price for food, other necessities, and utility bills. The spike in fuel prices also contributes to inflation which is now considered one of the top concerns of the American consumer according to a survey from the Morning Consult.  

Experts believe that this upwards trend in gas prices isn’t something that’s soon to stop. They say that gasoline prices are likely to stay elevated for the next few weeks if not months. 

“It’s difficult to know – it could be weeks or months,” said Patrick De Haan, GasBuddy’s head of petroleum analysis. “If Putin stays as president and signs a peace treaty, it’ll take months for countries to do business with him again because they have to gauge whether he’s reliable. If there is a regime change in Russia, the change [in gas prices] could come much quicker.” 

And another expert, Bill Adams, a chief economist for Comerica Bank, said in a report that inflation will likely get worse in March and April before it gets better.

“Inflation will accelerate in March and April as the knock-on effects of the Russia-Ukraine war push prices even higher at supermarkets, gas pumps and on utility bills,” Adams said

Eventually, the prices will go back down, but for now, prices seem that they will continue to grow.