Gas prices just rose at the fastest rate on record
IIt’s not your imagination: the huge spike in gasoline prices over the past few weeks has been historic.
The average price of regular gas in the country fell from $3.53 per gallon on February 21 to $4.32 on March 14. That’s a jump of 22%, according to data released by the US Energy Information Administration (EIA), representing the fastest rate of gas increase. prices over a three-week period since the agency began tracking this data in 1990.
The EIA attributed most of the sudden growth in retail gas prices to higher crude oil prices following the Russian invasion of Ukraine in late February.
Prices have since fallen slightly and averaged $4.24 per gallon on March 21, according to the EIA.
In a blog post on Monday, GasBuddy’s head of oil analysis Patrick De Haan noted that the modest decline “is still subject to changes in global supply and demand, Covid and the war of Russia versus Ukraine,” adding that “so far, gasoline demand has shown absolutely no signs of buckling under the pressure of higher prices.
This is especially true on the West Coast, where prices have continued to rise. On Tuesday, the price of a gallon of gas averaged over $6 in Los Angeles, a first for a major US city. Not to mention that prices tend to rise in the summer anyway, thanks to the peak holiday season and the annual switch to a gasoline blend better suited to warmer temperatures but more expensive to produce.
De Haan added that if the crisis in Ukraine continues to escalate, “it’s not impossible that gasoline prices still have to climb significantly for Americans to start curbing their insatiable demand for gasoline.”
Are gas prices really at record highs?
While the speed at which gasoline prices have risen recently has not been seen in years, current prices at the pumps have not reached record highs in terms of true cost.
A recent analysis of the the wall street journal found that when adjusted for inflation, gasoline prices were actually more expensive in 2014. In terms of actual price levels, current fuel costs are actually similar to what drivers were paying in the early 1980s. Newspaper noted that these prices were even more taxing on a typical household budget in the 1980s because cars were far less fuel efficient and required far more gas per mile than they do today.
Inflation-adjusted gasoline prices peaked in the summer of 2008 during the financial crisis, when the price of a gallon of gasoline hit $4.11, according to the EIA. This is the equivalent of $5.27 in 2022 dollars.
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