US gas prices soar to a record $5 a gallon as inflation soars | US news

Gasoline prices in the United States, the main driver of the highest inflation rate the United States has seen in 40 years, hit a record high of $5 a gallon on Saturday. There was little to suggest that they would fall any time soon.

Much of the political right is blaming Joe Biden for the price hikes. Others say prices rose because Russia invaded Ukraine. Democrats in Congress accuse oil companies of price gouging.

In fact, gasoline prices have risen since April 2020, when the shock of the coronavirus pandemic drove prices below $1.80 a gallon, according to government figures. Prices hit $3 in May 2021 and topped $4 in March.

On Saturday, the average price per gallon nationwide rose just above $5, a record, according to the AAA Automobile Club. The average price jumped 18 cents in the previous week and was $1.92 higher than this time last year. State averages ranged from $6.43 a gallon in California to $4.52 in Mississippi.

Global oil prices have risen unevenly but sharply since December. The global price of crude oil nearly doubled, with the US benchmark rising roughly the same amount. On Friday, it closed at more than $120 a barrel.

There are several factors driving prices up.

The Russian invasion of Ukraine and the resulting sanctions by the United States and its allies contributed to the rise. Russia is one of the largest oil producers.

The United States is the world’s largest oil producer, but its ability to convert oil into gasoline has fallen by 900,000 barrels of oil per day since the end of 2019, according to the US Department of Energy.

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Oil and gasoline supplies swelled as energy consumption rose with the economic recovery. Also, Americans usually drive more starting on Memorial Day, which is the end of May holiday, which increases demand.

Analysts say there are no quick fixes, as supplies cannot be increased overnight, and if anything, global oil supplies will only tighten with sanctions against Russia.

European Union leaders have pledged to ban most Russian oil by the end of this year. The US imposed a ban, even as Biden acknowledged it would affect consumers.

He declared that “the defense of freedom will come at a price.”

The United States could ask Saudi Arabia, Venezuela, or Iran for help, but each of these options carries moral and political calculus.

Republicans have called on Biden to increase domestic oil production, for example by allowing drilling in more federal and offshore lands, or to reverse his decision to revoke a permit for a pipeline that could take Canadian oil to Gulf Coast refineries.

Democrats and environmental experts say that would undermine efforts to curb climate change. Even if Biden ignores a large faction of his party, it will be months or years before these actions lead to more gasoline at American pumps.

At the end of March, Biden announced another exploitation of the Strategic Petroleum Reserve. The average gallon price has jumped 77 cents since then, which analysts say is partly due to refining pressures.

Some refineries that produce gasoline, jet fuel, diesel and other petroleum products have closed during the pandemic, when demand has collapsed. While a few are expected to boost capacity in the next year or so, others are reluctant to invest in new facilities because the transition to electric vehicles will reduce demand.

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The impact of higher energy prices on low-income families the most. The National Association of Energy Aid Managers estimates that 20% of lower-income families could spend 38% of their income on energy including gasoline this year, up from 27% in 2020.

If Americans reduce their car, they will reduce demand and prices.

“There has to be a point where people start cutting back, and I don’t know what the magic point is,” said Patrick de Haan, analyst at gas shopping app GasBuddy. “Is it going to be $5? Is it going to be $6 or $7? That is the million dollar question. A dollar that no one knows.

On Saturday at a BP station in Brooklyn, New York, computer worker Nick Chavzin blamed Putin for $5.45 a gallon and said he would make sacrifices to pay the price.

“I just cut back on some of the other things — vacations, discretionary things, things that are good to have but you don’t need,” he said. “The gas you need.”

George Chen said he would have to raise fees for his work in film production.

“It will be painful for people who do not get their salary increases right away,” he said. “I can only imagine families who can’t afford it.”

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