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The current average price of gasoline in the US is $3.68 per gallon, which is $0.01 higher than yesterday, $0.02 lower than last week, and $0.22 lower than last month.
The weekly drop in gas prices, while small, is a welcome respite for Americans who have dealt with sky-high prices at gas stations. An increase in gasoline demand after the Covid lockdowns, coupled with diminished supply, forced prices higher. Western sanctions on Russian gas imports due to the war in Ukraine exacerbated the problem.
While gas prices may be falling, they are still high. The average price of a gallon of gasoline a year ago today was $3.19.
Which state has the highest gas prices?
California has the highest gas price, averaging $5.49 per gallon for regular gas.
Which state has the lowest gas prices?
Mississippi has the lowest gas price, averaging $3.09 per gallon for regular gas.
Why are gasoline prices so high?
Oil is a traditionally volatile commodity, as it is traded in futures, not current prices. But high demand for crude oil and a limited supply pushed gasoline prices to record levels this year, and the geopolitical situation exacerbated it.
During the onset of the Covid-19 pandemic, demand for gasoline plummeted as stay-at-home orders prevented people from hitting the road. Oil producers responded to the drop in demand by cutting production, but once lockdowns were lifted, there was a massive surge in demand and not enough oil to meet it.
There were also a number of pipeline issues last year that contributed to a delay in oil production, including a cyberattack on the Colonial Pipeline that shut it down for six days, as well as a spill on another pipeline later in the year. .
The war in the Ukraine exacerbated these supply and demand problems. Russia, which produces about 10% of the world’s oil supply, is being heavily sanctioned by Western countries; in particular, the US has completely banned imports of Russian oil. Cutting off part of the global oil supply chain means a relatively large part of the supply is gone and countries are scrambling to find alternatives.
In an effort to boost supply, President Joe Biden authorized the largest release of oil from world reserves in history. A Treasury Department analysis estimates that the launches, both domestically and internationally, have reduced gasoline prices by as much as 40 cents a gallon.
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