Gas surged to a record high, but signs point to higher prices in the future.
Politics aside, gas prices are exploding at an alarming rate. This week, the nation hit a new average high fuel price as gas hit $4.58 per gallon. That's tough, but even more alarming is the fact that several factors will probably continue pushing gas prices for the foreseeable future. Places like California, Oregon, and Washington state are girding themselves for fuel prices that could crest $10 per gallon. It's no wonder they want people to drive more EVs.
Gas prices climbed ten percent this week, according to AAA, as drivers buy more fuel and supplies tighten. Many worry that the U.S. economy is backsliding into recession, which could actually be a good thing for gas prices. AAA notes that a downturn could suppress demand, leading to a decline in the price of crude. Things could improve over time as gas vehicles slowly fade away, but that's not an immediate fix, nor is it a guarantee. The situation is crazy enough that even Elon Musk is suggesting an increase in oil production.
Ten states recorded the most significant increases in average gas prices, some of which are legitimately dramatic. Alaskans saw an average increase of $.34 per gallon, while drivers in Connecticut paid $.30 more. The Ram 1500 pickup truck is the most-sold vehicle in Alaska, and with its extended 26-gallon fuel tank, the price increases could lead to an $8 or so jump per tank of fuel, and that's just in the last week.
Fuel prices are ballooning partly because of Russia's invasion of Ukraine, but the energy markets were tight before a single shot was fired. When the pandemic shut the world down, oil producers cut output, but as we know, the world is clawing its way back to something closer to normal. With that came a return in demand, but the oil market hasn't caught up.
President Biden released oil reserves to ease the pressure, but war has a way of magnifying even the smallest of economic issues. This week, as it's looked increasingly likely that some will see $10 gas before the end of the year, the U.S House of Representatives passed a bill that would give President Biden the authority to ban price gouging on gas and home energy fuel. The bill still needs to pass the Senate, which is far from guaranteed in today's political climate.
All of this is likely to push drivers to buy electric, but that's not a silver bullet to kill pain at the pump. Even the cheapest EVs tend to be more expensive than an equivalent gas vehicle, and the time it takes to recover the extra purchase costs in fuel savings could extend to years. You'll avoid the stress of seeing gas prices every time you stop for fuel, but your out-of-pocket expense will almost certainly be higher up front.