Gas prices surged to the highest level since 2008 on Sunday, hitting $4 for only the second time ever, as Russia’s war in Ukraine dramatically impacts the cost of crude oil.
The national average for a gallon of gas hit $4.009 on Sunday, according to AAA, which is the highest since July 2008, not adjusted for inflation.
The war in Ukraine, coupled with rising inflation at home of 7.5 percent, are the main culprits why drivers are spending more than $100 to fill up on full tank of regular unleaded gas in nearly a third of the country.
Andy Lipow, president of Lipow Oil Associates, said the next stop for the national average is $4.50 a gallon as supply disruptions ripple across the energy complex.
‘Oil buyers are reducing their purchases of refined products from Russia causing Russian refineries to shut down,’ he said. ‘Dock workers are refusing to unload vessels carrying oil and gas. Insurance rates are skyrocketing causing vessel owners to cancel ship bookings loading in Russia and this is also impacting on the ability of Kazakhstan to sell their oil.’
Gas prices rose by an average of 15.8 cents a gallon on Friday across the U.S. and were up another 8 cents on Saturday – as the cost at the pump increased 33 cents over the last week.
It was the second highest spike in gasoline prices ever recorded and beaten only by the 18.1-cent spike when Hurricane Katrina tore through Gulf in August 2005.
Gas prices have risen by 37 cents since Russia invaded its neighbor.
There are now eleven states – California, Hawaii, Nevada, Oregon, Washington, Alaska, Illinois, Arizona, New York, Connecticut and Pennsylvania – where the average price is already over $4 a gallon. Another six states have average gas prices hovering near $4 a gallon.
Prices for gas and diesel fuel, over $5 a gallon, are displayed at a petrol station in Monterey Park, California on Friday. Californians have long had the highest gas prices in the nation
The price of gas is approaching an all-time high. On Saturday, the national average was $3.92
The average price of gas is over $4 a gallon in eleven states. They are: California, Connecticut, Hawaii, Nevada, Oregon, Washington, Alaska, Illinois, New York, Pennsylvania, Arizona
The current national average in on the rise as a result of sanctions on major oil producer Russia, up 50 cents from February and up $1.17 from a year ago
One twitter account detailed how gas prices rose by an average of 15.8c a gallon on Friday – the second highest spike ever beaten only by the 18.1c spike when Katrina tore through Gulf
Those filling up their cars on Friday winced at the spiraling costs.
California drivers are paying an average of more than $5 for a gallon ($1.34 per liter), according to the American Automobile Association (AAA), up more than a third from a year ago.
‘It’s going to affect the prices,’ resident Mike Hernandez said, referring to the conflict in eastern Europe. ‘I’m not really into politics or anything like that, but now that this thing is going on between Russia and Ukraine, it’s just that sad.’
Russian President Vladimir Putin’s invasion of neighboring Ukraine has sent financial markets into meltdown.
Gas prices are rising at fastest rate in history, since Hurricane Katrina in 2005. Gas prices of over $5 a gallon are posted at a petrol station in Alhambra, California on Friday
Gas prices have soared 27 cents since Wednesday and 38 cents since Russia’s invasion of Ukraine nine days ago
Prices for crude oil, the raw material for gasoline, have been hit hard, and are up well above $110 a barrel, with players fretting about the impact on Russian supplies, as sanctions choke Moscow off from the global economy.
The average price of gas a year ago was $2.75 a gallon. Prices were recovering from the pandemic when stay-at-home orders and business shutdowns slashed demand for gasoline.
A lack of supply resulted in a gas shortage last summer, sending U.S. gas prices to a seven-year high.
‘This is not the end of it. We’re already up another 14 cents on wholesale gas prices this morning,’ said Tom Kloza, global head of energy analysis for OPIS to CNN.
‘It’s absolutely out of control. When you get increases this quick, and this dramatic, you really scald the public,’ he said.
While all countries have access to the same gasoline, subsidies or taxes imposed locally mean the ultimate cost to consumers varies wildly.
For example, in oil-producing Nigeria, which subsidizes fuel, the official price is 40 US cents per liter.
Hundreds of Ukrainian Americans and others protest near a gas station, featuring high prices for gas, during a rally to denounce Russia’s invasion of Ukraine along Santa Monica Blvd in LA
In Hong Kong, drivers were already paying US$2.50 per liter in 2021, according to the Economist Intelligence Unit.
On average, Americans pay around $1 per liter, according to the AAA, and even California’s $1.34 per liter is well below the prices paid by Europeans.
‘It’s expensive but it’s always been more expensive here in California, so I guess we’re used to it,’ said Harry Lee, as he fueled up on the way to work in Los Angeles on Friday. ‘I’ll be happy when it goes down but so far it doesn’t impact me too much,’ he added.
‘My cousin, who drives for Uber here in LA, is complaining a lot though. I guess it can be hard on him if gas remains at this level for too long.’
California’s relatively high gas prices are the result of state taxes, as well as stricter refining rules that require specific fuel formulae intended to reduce air pollution in the hot summer months.
People are pictured waiting in line to purchase gas in the aftermath of Hurricane Katrina in 2005 when oil refineries shut and forced others to reduce operations. Gas prices rose sharply
While many drivers have grumbled about seeing pump prices rise almost daily, some say they are prepared to put up with the extra cost because of the pictures of the war in Ukraine they are seeing on the news.
‘I would rather have high gas prices here than an authoritarian regime in the Ukraine,’ said Los Angeles resident Jacqueline St-Anne.
‘If we have to suffer with a little bit of inflation and gas prices for a while to assure that such a wonderful country as Ukraine has an opportunity to develop its democracy, we should do that.’
For others, there is a simple solution to paying through the nose.
‘I just bought a Tesla,’ said Matthew Reynl, speaking about the electric car. ‘That’s my solution to the gas prices going up.’
Workers in the UK are refusing to unload Russian oil from a German-flagged ship which is moored at a major British oil refinery. The Seacod vessel is at a terminal on the River Mersey, from where oil is usually pumped to Stanlow Oil Refinery