US gas prices jumped another 8 cents a gallon in Saturday’s reading, a bit slower than Friday’s 11-cent increase but still faster than any other spike in prices since Hurricane Katrina in 2005.
The national average price for a gallon of regular gas stood at $3.92 a gallon Saturday, according to AAA. That is the highest price since April 2012.
Gas prices have soared 26 cents since Wednesday and 39 cents, or 11%, since February 23, the day before Russia’s invasion of Ukraine. Each of those increases marks the largest price hikes since Hurricane Katrina slammed into the US Gulf Coast in 2005, devastating the nation’s oil and gas industry.
With prices rising so rapidly, a national average of $4 a gallon, as well as the record $4.11 set in 2008, will probably be reached soon.
“This is not the end of it,” said Tom Kloza, global head of energy analysis for OPIS, which collects data from 140,000 gas stations nationwide for AAA’s price averages. Wholesale gasoline prices rose another 23 cents in trading Friday. Kloza said the wholesale gas price increases are likely to be passed onto consumers in short order.
“It’s absolutely out of control,” he said.
The average price a year ago was $2.75 a gallon, as prices were still recovering from the plunge that occurred early in the pandemic. Stay-at-home orders and business shutdowns slashed demand for gasoline.
The average household uses about 90 gallons a month, said Kloza, so a $1.17 increase in gas prices costs that household about $105.50 a month, or just under $1,300 over the course of a year.
Prices have been rising because Russia is one of the world’s major oil exporters, with most of its oil going to Europe and Asia. Russian oil made up only 2% of US oil imports in December, according to Energy Department data.
But oil is priced on global commodity markets, so the impact of Russia on global markets is felt everywhere.
The sanctions placed on Russia’s economy following its invasion of Ukraine have exempted Russian oil exports – so far. But traders have been reluctant to purchase Russian oil due to uncertainty about being able to close the transaction with the limits on the Russian banking sector, as well as concerns about finding oil tankers willing to call on Russian ports to load any of the purchased oil.
There have been calls for the United States to ban the import of Russian oil. But that probably would have limited impact on either global or US prices since so little of it is being shipped to the United States, Kloza said.
“It’s not mission-critical. Canada, Mexico, Saudi Arabia – those are the big boys” in terms of US oil imports, said Kloza. “Russia is a bit player.”
Kloza said even without a ban on US imports of Russian oil, he could see the average price rise to a new record of between $4.25 to $4.50 a gallon. He said the rapid rise in the price of gas is making a particularly strong impression on the public, compared to a slow but steady increase in prices.
“When you get increases this quick, and this dramatic, you really scald the public,” he said.
California’s statewide average jumped 13 cents on Friday to $5.07 a gallon, making it the first state ever to have an average price above $5 a gallon. Its average price rose another 11 cents to $5.18 Saturday.
There are now 11 states – California, Hawaii, Nevada, Oregon, Washington, Alaska, Illinois, New York and Pennsylvania, Connecticut and Arizona, as well as Washington, DC – where the average price was already over $4 a gallon, with Connecticut, Arizona and Washington, DC, crossing the $4 mark with the latest reading.
Six more states – New Jersey, Massachusetts, Rhode Island, Vermont, Maryland and Delaware, are within a nickel of that $4 average.
The average price of a gallon of diesel is now $4.41 a gallon, up 15 cents since Friday. It hit $4 this past weekend. While relatively few US passenger cars use diesel, virtually all large trucks depend on it. And most trucking companies have a schedule of fuel surcharges that are based on average prices, meaning that the cost of transporting almost all goods is increasing for businesses, a cost increase that is also likely to be passed onto consumers in the form of higher prices.