New York (CNN Business)The average price of a gallon of regular gasoline hit $4 on Sunday, the highest since 2008. And as prices soar amid Russia’s attack on Ukraine, the record high of $4.11 a gallon, the was erected this year is likely to fall any day.
The national AAA average is $4.01, up 9 cents a gallon since Saturday’s reading and up 47 cents, or 13%, since Russia invaded Ukraine 11 days ago.
The daily increases over the weekend are larger than any one-day jump in prices since Hurricane Katrina hit the US Gulf Coast in 2005, damaging much of the country’s oil and gas producing regions and sending prices soaring.
There are still some parts of the country where $4 a gallon of gas is still tight. Most of the central states, from North Dakota south to Texas, average no more than $3.71 a gallon.
But prices are rising rapidly everywhere. The lowest statewide average is in Missouri, where unleaded is $3.60 per gallon. But that’s up 28 cents, or 8%, in the last week alone.
There are now 18 states plus Washington DC where the price is $4 or more. The entire Northeast and Mid-Atlantic, West Coast, Nevada, Arizona, Illinois, Alaska and Hawaii have national averages of $4 or more. And three other states, Florida, Michigan and Indiana, are less than a half cent away from the $4 mark.
The highest prices are recorded in California, where the national average is $5.29 per gallon.
“That’s not all,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service, which provides data to AAA from 140,000 stations across the country. Wholesale gasoline prices rose 23 cents on Friday, an increase Kloza said would be passed on to consumers shortly.
“It’s absolutely out of control,” he said.
Prices have risen because Russia is one of the world’s largest oil exporters and most of its production goes to Europe and Asia. According to Energy Department data, Russian oil accounted for just 2% of US imports in December.
But the price of oil is set in global commodity markets, so the impact on global markets is being felt everywhere.
The sanctions imposed on the Russian economy after the invasion have so far exempted oil exports. However, traders have been reluctant to buy Russian oil, unsure about completing transactions given the limitations of the country’s banking sector and concerns about finding oil tankers willing to dock at Russian ports.
There have been calls for the United States to ban imports of Russian oil. But that would likely have limited impact on global or domestic prices given so little is being shipped to U.S. markets, Kloza said.
“It’s not business critical. Canada, Mexico, Saudi Arabia — those are the big boys” in terms of US oil imports, Kloza said. “Russia is a bit of a player.”
Even without a ban on US imports, Kloza expects the median price could rise to a new record of $4.25 to $4.50 per gallon. Such a rapid rise in prices makes a particularly strong impression on consumers, he added.
“When you get raises that fast and that dramatic, you really scald the public,” Kloza said.
The average price a year ago was $2.76 a gallon as the market was still recovering from the plunge at the start of the pandemic and stay-at-home orders and plant closures reduced demand for gasoline.
The average US household uses about 90 gallons of gasoline per month, Kloza said, so a $1.25 increase will cost a consumer about $105 per month, or nearly $1,300 over the course of a year.
— CNN’s Matt Egan contributed to this report
Add Comment