In the past two weeks alone, the average price per gallon of gasoline in the United States has increased by 70 cents, jumping to a high price of $4.43 per gallon as Putin continues to pummel Ukraine and elevate gasoline prices.
Gasoline prices, which were already high before the invasion, have soared to new heights, with Trilby Lundberg of Lundberg Survey observing that the newest price reflects a 32 cent increase over the previously highest price of $4.11 per gallon that was set in July 2008.
However, when adjusting for inflation, the $4.11 per gallon in July 2008 could be considered the equivalent of $5.24 per gallon in today’s dollars.
However, the price per gallon at the pump now is $1.54 higher than it was approximately twelve months ago.
Even more troublingly, gas prices are highly likely to remain high in the short run while the prices of crude oil continue to accelerate as the supply chain crisis increases in intensity throughout the world.
The price of oil contrasts strongly with pandemic times, when crude prices dramatically decreased. In fact, the price of oil futures became negative, which meant that various sellers were paying buyers to take oil away.
With the rapid increase in prices of oil as the economy rebounded, demand increased beyond producers’ capacity, and inventories rapidly dried up.
Prices further began increasing as Russia, a major energy producer, began its invasion of Ukraine.
As a result, gas prices have escalated even more significantly in the past two weeks, ranging form $3.80 per gallon in Tulsa, Oklahoma to $5.97 pre gallon in San Francisco, California.
Moreover, the price of diesel has also increased dramatically, costing $2.11 more in 2022 than it did during the same time period in 2021.