- Gasoline prices have reached a historical high and fuel experts suggest that per-gallon averages won't revert to below $4 until November.
- International conflict in Ukraine has led to export sanctions against Russia, including the bulk of crude oil and materials necessary for gas production, leading to the steep balloon of average gas prices Americans have seen at the pump.
- But inflation and relaxed COVID-19 guidelines have also had an effect on average price points, and with increased demand this summer, national averages may approach $5, according to the latest estimates.
- Below, you'll learn: Why are gas prices rising? Which state has the highest gas prices currently? And when will gas prices go down?
After a new all-time historical record for the highest gas cost average in the United States — at $4.10 per gallon, continuing to rise up to $4.33 later in the week, according to the American Automobile Association (AAA) — many Americans are wondering when gas prices will stop ballooning. President Biden has since announced a ban on imports of Russian oil and natural gas in the wake of the nation's invasion of Ukraine, and experts in the energy industry are seeing signs that gas pricing for the average consumer won't level out anytime soon, according to widespread reports.
AAA data suggests that the national cost of gas on average skyrocketed more than 55 cents per gallon in just a week, a dramatic climb that hasn't been seen since the national recession of 2008, per the Hill. While experts firmly expect that steep, steady price increases will continue to be the reality for many Americans into early spring, data being collected by energy insiders suggests that most won't see any sort of price break until the holiday season later this year.
Analysts at community-based service app GasBuddy, which experienced a crash earlier this week due to unprecedented demand, have revised their 2022 fuel price forecast based on millions of data points the service routinely turns over. Some may be surprised to hear that previous estimates earlier this year already projected increased averages across the board — but new estimates peg gas prices to crest at a national average of $4.25 later this May, a figure that's already been surpassed recently. Currently, the national high for gas prices is over $7 in California, per AAA data, and metropolitan cities can expect to see similar hikes in the foreseeable future.
The reasons behind the dramatic increases aren't just due to international conflict, however. It's why GasBuddy's report and other sources indicate that costs will remain high. Here's what we know about current trend forecasting and what you can expect as the year unfolds.
Editor's note: Gas averages were reported accurately as of press time per data sourced in this report, but may vary based on current volatile markets. We'll continue to update this article with up-to-date averages as they become available.
Why are gas prices rising?
The main reason gas prices have inflated over the last few weeks is the Russian invasion of Ukraine and subsequent political sanctions, mainly stemming from the U.S. and members of the European Union, given that Russia is a major exporter of oil to many nations across the globe. Reuters reports that the U.S. imported more than 20 million barrels of crude oil and other gas products monthly in 2021, on average; that's about 8% of total imports.
Furthermore, the kind of oil coming out of Russian markets is crucial for U.S. refineries, as it is a "heavier, sour crude" that experts in the gas industry tell USA Today is required for optimal gas production and output stateside.
Inflation is also at play, as consumer goods are becoming more expensive than previous years' averages in recent weeks and U.S. inflation is up 7% year-over-year in total. Given that values on Wall Street experienced its largest decline in over a year this week as markets continue to react to high prices, it's expected that inflation may continue to impact other consumer-facing commodities (including gas) in the months to come. It's a trend that isn't limited to gas, as prices across the board — everything from groceries to cars — are rising at the fastest rate experts have seen in nearly 40 years, as explained by BBC News.
But analysts at GasBuddy have also indicated that demand for gas is steadily increasing as more COVID-19 restrictions are loosened across the country. As new COVID-19 case rates are on the decline in many major cities and highly populated suburbs, more Americans are eager to hit the road and get back to travel routines for the upcoming summer season.
The increased interest and demand for gas that Americans have exhibited for the first two months of 2022 indicates that total supply is down, which was causing prices to creep upward even prior to international conflict, which AAA officials touched upon in a new external review.
Which state has the highest gas prices?
A majority of the states within the continental U.S. have experienced rapid upward swings in gas prices this month, but California has seen gas averages swell the most. Averages remain at around $5.72 in The Golden State and is the only state to average over $5 currently (diesel is currently at $6.29 per gallon as well).
All but 12 states have averages that have risen above $4 per gallon, according to recent GasBuddy data, with Hawaii, Nevada, Oregon, Washington, Alaska, Illinois, Connecticut, New York and Pennsylvania rounding out the most expensive places to buy gas currently. Midwestern states have proven to be the most resistant to rising gas costs as of this week, with Kansas averaging at $3.82 per gallon, as reported by the Kansas City Star.
When will gas prices go down?
Re-released earlier this week, GasBuddy's gasoline predictions put average costs of gas at just about $4.25 per gallon in May, which has already been surpassed within the first week of March. Representatives at the company told CNN that national averages may surpass $5 per gallon if tensions in Ukraine aren't resolved soon, but even so, gas averages are projected to remain at over $4 until the end of November 2022.
"It's a dire situation and won't improve anytime soon," said Patrick De Haan, head of petroleum analysis at GasBuddy, in a company news release. "The high prices are likely to stick around for not days or weeks, like they did in 2008, but months. GasBuddy now expects the yearly national average to rise to its highest ever recorded."
Ultimately, forecasting is likely to be inconclusive on the reality of gas prices for the rest of the year, as there are too many factors that are extremely volatile for experts to consider. Even De Haan, who has been constantly consulting real-time data collected by drivers across the nation, has pointed out that wholesale oil and gas prices have slightly dropped within the last few days as of press time.
U.S crude oil costs per barrel were down about $15 on Wednesday, and brent crude (an international standard) was around $20 less on the same day, via tracking by Bloomberg — and current figures are also trending downward as well.
"Oil prices play a leading role in pushing gas prices higher," said AAA representatives. "Consumers can expect the current trend at the pump to continue as long as crude prices climb."