Gasoline prices have risen significantly in recent months and weeks. Naturally, average American citizens want to know the reasons behind this price surge that has set the national average for a gallon of gasoline at $4.32, with Illinois in front of the pack at $4.56 on average. It is important to note that gasoline prices rise and fall with the prices of crude oil, though that effect is not always in sync or to the same degree. We should also take into consideration that cause and demand play the biggest part in whether the price of gasoline rises or falls.

According to Patrick De Haan, GasBuddy’s  head of petroleum analysis, today’s gas prices have their roots in the Covid-19 pandemic, as well as the conflict in Ukraine. “The overall aspect is that supply and demand have changed. Everything was upended by Covid - if that hadn’t happened, our situation would be different.” When the Covid pandemic hit America in March of 2020, demand for gasoline plummeted as Americans sheltered at home due to nationwide lockdowns. The sharp decline in demand sent gas prices to under $2.00 per gallon by April 2020. However, while this was happening, oil producing nations also slashed oil production. Russia, for example, cut their production by 10 million barrels - roughly 10% of the world wide supply. By late 2021, however, the global economy was largely recovering from the “Covid Economy” and demand for gasoline rose immensely. Problem is, oil producing nations did not ramp up their production to meet the rising demand. As we know, when demand outpaces production, prices rise.

If you would like to know the main reason gas prices are currently rising, look no further than Vladimir Putin and his war in Ukraine. As of March 4th, oil prices have risen 58% which, in turn, have led to a 24% rise in the cost of gasoline. The reason for this is simple: Russia is the world’s 2nd largest oil producer, behind the U.S., and it is feared that that supply from Russia may be disrupted. If Russia continues their aggressive actions towards Ukraine, oil prices will likely remain high. Unfortunately, high oil prices only help Putin as Russia’s budget depends heavily on their petroleum exports. This is where sanctions of Russia come into play. If the rest of the world can squeeze the Russian economy enough, it could offset any financial gains made by Russia due to the rising cost of petroleum. 

Rising gas prices are not the result of the actions of any American, or the current administration. Bottom line - worldwide events mostly beyond our control are impacting our costs of living in major ways for most families. Until worldwide oil production fully recovers from the Covid pandemic and Russia remains in Ukraine, Americans are going to feel the pain at the pump.