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Today’s average price of gas in the U.S. is $3.76 per gallon, down $0.02 from yesterday, $0.08 from last week and $0.31 from last month.
The weekly drop in gas prices, though small, is a welcome reprieve for Americans who have grappled with sky-high prices at the pump. An increase in demand for gasoline after Covid lockdowns, coupled with a diminished supply, forced prices upward. Western sanctions on Russian gas imports due to the war in Ukraine exacerbated the problem.
While gas prices may be falling, they remain high. The average price of a gallon of gas one year ago today was $3.19.
Which State Has the Highest Gas Prices?
Hawaii has the highest price of gas, with an average of $5.30 per gallon of regular gas.
Which State Has the Lowest Gas Prices?
Texas has the lowest price of gas, with an average of $3.23 per gallon of regular gas.
Why Are Gas Prices so High?
Oil is a traditionally volatile commodity since it trades on futures, not current prices. But high demand for crude oil and a limited supply pushed gas prices up to record levels this year—and the geopolitical situation exacerbated it.
During the onset of the Covid-19 pandemic, demand for gasoline plunged as stay-at-home orders kept people from hitting the road. Oil producers responded to the demand slump by cutting back on production—but once lockdowns were lifted, there was a massive surge in demand, and not enough oil to keep up with it.
There was also a flurry of pipeline issues last year that contributed to a lag in oil production, including a cyberattack on the Colonial Pipeline that shut it down for six days, as well as a spill at another pipeline later in the year.
The war in Ukraine compounded these supply and demand issues. Russia, which produces about 10% of the world’s oil supply, is being heavily sanctioned by Western countries; in particular, the U.S. has completely banned Russian oil imports. Cutting off the portion of the global oil supply chain means a relatively significant portion of supply is now gone, and countries are struggling to find alternatives.
In an effort to boost supply, President Joe Biden authorized the largest release of oil from global reserves in history. An analysis from the Department of Treasury estimates that the releases, both domestically and internationally, have reduced gasoline prices by up to as much as 40 cents per gallon.
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