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business Monday 13 June 2022
Several factors are converging to push gas prices higher

By DAVID KOENIG lower-income families the
AP Business Writer hardest. Workers in retail
DALLAS (AP) — There is lit- and the fast-food industry
tle evidence that gasoline can't work from home —
prices, which hit a record they must commute by car
$5 a gallon on Saturday, or public transportation.
will drop anytime soon. The National Energy Assis-
Rising prices at the pump tance Directors Association
are a key driver in the high- estimates that the 20% of
est inflation that Americans families with the lowest in-
have seen in 40 years. come could be spending
Everyone seems to have a 38% of their income on en-
favorite villain for the high ergy including gasoline this
cost of filling up. year, up from 27% in 2020.
Some blame President Joe WHEN WILL IT END?
Biden. Others say it's be- It could be up to motorists
cause Russian President themselves — by driving
Vladimir Putin recklessly in- less, they would reduce de-
vaded Ukraine. It's not hard mand and put downward
to find people, including pressure on prices.
Democrats in Congress, "There has got to be some
who accuse the oil compa- point where people start
nies of price gouging. cutting back, I just don't
As with many things in life, know what the magic point
the answer is complicated. is," said Patrick De Haan, an
WHAT IS HAPPENING? analyst for the gas-shop-
Gasoline prices have been ping app GasBuddy. "Is it
surging since April 2020, going to be $5? Is it going
when the initial shock of the to be $6, or $7? That's the
pandemic drove prices un- Gasoline prices are shown at a gas station Thursday, June 9, 2022, in Salt Lake City. million-dollar question that
der $1.80 a gallon, accord- Associated Press nobody knows."
ing to government figures. HOW ARE DRIVERS COP-
They hit $3 in May 2021 and day since the end of 2019, each of those options car- The average price per gal- ING?
cruised past $4 this March. according to the Energy ries its own moral and politi- lon has jumped 77 cents On Saturday morning at a
On Saturday, the nation- Department. cal calculations. since then, which analysts BP station in Brooklyn, New
wide average for a gal- Tighter oil and gasoline sup- Republicans have called say is partly because of a York, computer worker Nick
lon ticked just above $5, plies are hitting as energy on Biden to help increase refining squeeze. Schaffzin blamed Putin for
a record, according to consumption rises because domestic oil production WHY IS U.S. REFINING the $5.45 per gallon he was
auto club AAA, which has of the economic recovery. — for example, by allow- DOWN? shelling out and said he will
tracked prices for years. Finally, Americans typically ing drilling on more federal Some refineries that pro- make sacrifices to pay the
The average price jumped drive more starting around lands and offshore, or re- duce gasoline, jet fuel, die- price.
18 cents in the previous Memorial Day, adding to versing his decision to re- sel and other petroleum "You just cut back on some
week, and was $1.92 higher the demand for gasoline. voke a permit for a pipeline products shut down during other things — vacations,
than this time last year. WHAT CAN BE DONE TO GET that could carry Canadian the first year of the pan- discretionary stuff, stuff
State averages ranged MORE OIL? oil to Gulf Coast refineries. demic, when demand col- that's nice to have but you
from $6.43 a gallon in Cali- Analysts say there are no However, many Demo- lapsed. While a few are ex- don't need," he said. "Gas
fornia to $4.52 in Mississippi. quick fixes; it's a matter of crats and environmental- pected to boost capacity you need."
WHY IS THIS HAPPENING? supply and demand, and ists would howl if Biden took in the next year or so, oth- At the same station,
Several factors are coming supply can't be ramped up those steps, which they ers are reluctant to invest George Chen said he will
together to push gasoline overnight. say would undercut efforts in new facilities because have to raise the prices he
prices higher. If anything, the global oil to limit climate change. the transition to electric ve- charges his customers for
Global oil prices have supply will grow tighter as Even if Biden ignored a big hicles will reduce demand film production to cover
been rising — unevenly, but sanctions against Russia faction of his own party, it for gasoline over the long the gas he burns driving
sharply overall — since De- take hold. European Union would be months or years run. around New York City. He
cember. The price of inter- leaders have vowed to before those measures The owner of one of the acknowledged that others
national crude has roughly ban most Russian oil by the could lead to more gaso- nation's largest refineries, aren't so fortunate.
doubled in that time, with end of this year. line at U.S. service stations. in Houston, announced in "It's going to be painful for
the U.S. benchmark rising The U.S. has already im- At the end of March, Biden April that it will close the people who don't get pay
nearly as much, closing Fri- posed a ban even as Biden announced another tap- facility by the end of next increases right away," he
day at more than $120 a acknowledged it would af- ping of the nation's Strate- year. said. "I can only imagine
barrel. fect American consumers. gic Petroleum Reserve to WHO IS HURTING? the families who can't af-
Russia's invasion of Ukraine He said the ban was nec- bring down gasoline prices. Higher energy prices hit ford it."q
and the resulting sanctions essary so that the U.S. does
by the United States and its not subsidize Russia's war in LIKE US ON
allies have contributed to Ukraine. "Defending free-
the rise. Russia is a leading dom is going to cost," he
oil producer. declared.
The United States is the The U.S. could ask Saudi
world's largest oil producer, Arabia, Venezuela or Iran
but U.S. capacity to turn to help pick up the slack
oil into gasoline is down for the expected drop in Facebook.com/arubatoday/
900,000 barrels of oil per Russian oil production, but