National Average price of gas is up 66 cents per gallon in the last month as gasoline supply tightens

BOSTON — The national average price of gas in the U.S. surpassed $5 per gallon today for the first time ever, according to GasBuddy.

This long-anticipated milestone comes behind months of gas price increases across the country, accelerated by the rise in seasonal demand amidst supply constraints borne out of the pandemic.

Gas prices have surged in recent weeks as U.S. gasoline inventories have fallen over 25 million
barrels, or over one billion gallons, since the start of March amidst a global decline in refining capacity
due to the Covid-19 pandemic and accelerated demand going into the summer. The price of oil has
also jumped due to escalations stemming from the Russian war on Ukraine, as countries choke off
Russian oil supply via sanctions, pushing supply down at a time of rising demand.

In addition, U.S. refining capacity has fallen by some 1 million barrels per day over the last three years. All of these factors have created an environment ripe for a surge in gas prices, while Americans balk at prices but continue filling up as demand has seen little decline.

Gas price records set in 2022:

♦ March 5: National average price of gas breaks $4/gal for the first time since 2008
♦ March 7: National average price of gas breaks previous record; $4.10/gal
♦ March 10: Average price of gasoline peaks at $4.35/gal
♦ April 29: Average diesel prices reach new all-time high; $5.16/gal
♦ May 5: March record broken; prices rise above $4.35/gal

“It’s been one kink after another this year, and worst of all, demand doesn’t seem to be responding to
the surge in gas prices, meaning there is a high probability that prices could go even higher in the
weeks ahead,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “It’s a perfect storm of
factors all aligning to create a rare environment of rapid price hikes. The situation could become even
worse should there be any unexpected issues at the nation’s refineries or a major hurricane that
impacts oil production or refineries this summer.”

Image Sources

  • Rising Costs: Shutterstock