Gas prices are hitting a record high, and that news couldn’t come at a worse time. As summer kicks into gear across the country and Americans hit the road for vacation, prices at the pump reached more than $5 per gallon on average in the U.S. for the first time in history, according to GasBuddy. The crowd-sourced gas finder announced in March that the average had surpassed $4 per gallon for the first time since 2008 during the recession.
AAA is showing an average of slightly less at $4.97, but it doesn’t seem worth quibbling about three cents when it’s that close. The organization also shows that California leads the country in high fuel costs with an average of $6.40 per gallon, and Georgia is the lowest at $4.41 per gallon.
Goldman Sachs predicted this week that prices for Brent crude oil (the global price benchmark for Atlantic basin crude oils) could hit $140 per barrel this summer, which is $20 more than the current price per barrel. Worse, it’s more than previously predicted at $125 per unit.
Russia's war in Ukraine is a driving force, especially as European Union countries reduce their imports of Russian oil. As North America enters hurricane season, any damage to oil refineries could further complicate the situation.
“It’s been one kink after another this year, and worst of all, demand doesn’t seem to be responding to the surge in gas prices, meaning there is a high probability that prices could go even higher in the weeks ahead,” said GasBuddy Head of Petroleum Analysis Patrick De Haan. “It’s a perfect storm of factors all aligning to create a rare environment of rapid price hikes. The situation could become even worse should there be any unexpected issues at the nation’s refineries or a major hurricane that impacts oil production or refineries this summer.”
You might think that gas prices would send buyers straight to the nearest dealer for an EV or, at the very least, a hybrid. However, the combination of supply chain issues and chip shortages means that it is not an easy task, either. And airfare is climbing at an astonishing rate as well. Maybe a cross-country bike trip is in order. Or borrow your neighbor's Nissan Leaf.