Gas prices have slowly fallen since March, when a gallon topped $4.33 on average nationally, according to AAA data. But they’re starting to creep up again, and it could be awhile before Americans start to see prices come down, gas experts told USA TODAY.
Between Monday and Friday, the national average for a gallon of regular gasoline increased by nearly 4 cents to $4.16.
Demand for gas typically is elevated in the summer as more Americans take road trips, which tends to put upward pressure on gas prices. The same is likely going to play out this summer, but the war in Ukraine could cause prices to go even higher.
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As for how high, “it’s basically impossible to get a good gauge on where we’ll be this summer because of the wide range of possibilities,” said Patrick De Haan, head of petroleum analysis at fuel savings app GasBuddy.
“I’m very concerned,” said Rep. Ro Khanna D-Calif.
Biden’s Russian oil ban
A number of factors are at play.
In March, President Joe Biden banned Russian oil from being imported into the United States. Even though the U.S. is a net producer of oil, Russia accounted for 3% of all oil the nation imported in 2021. Russian oil plays a much more significant role in Europe, accounting for 30% of all oil imports there, according to an analysis by S&P Global Commodity Insights.
EU members stopped short of banning Russian oil but are considering a gradual phase-out. While Russia’s state-controlled gas company, Gazprom, said it stopped supplying natural gas to Poland and Bulgaria on Wednesday.
That shouldn’t have a material impact on gas prices consumers pay at the pump “but it escalates the situation, which could in the future have an impact,” De Haan told USA TODAY.
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COVID-19 outbreaks in China, which could prompt lockdowns within economic hub cities like Shanghai, may ease pressure on gas prices in the U.S. if less oil is exported, he added.
If prices go up this summer, it’s not because the U.S. isn’t producing enough oil, said Sen. Sheldon Whitehouse, D-R.I. “The more the U.S. companies produce, the more cartels can adjust their own behavior to keep prices high,” he said, referring to the Organization of the Petroleum Exporting Countries.
OPEC, which is made up of 13 member countries, sets crude oil production targets, which influences the price consumers pay for gas around the world. Although the U.S. is the top oil producer in the world, it is not part of OPEC.
Consumers rethink summer travel plans
Nearly 70% of U.S. adults are changing their summer travel plans because of inflation, which includes high gas prices, according to a survey in late March by Bankrate.
Overall, U.S. consumers are paying 8.5% more for goods and services compared with last year. The 18.3% increase in prices for gasoline Americans experienced in March accounted for most of the increase in last month’s overall Consumer Price Index, which rose by 1.2% from February.
Gas stimulus checks and tax holidays
Several Democratic-led proposals, one of which Whitehouse co-sponsored with Khanna, would in effect send gas stimulus checks to lower-income Americans.
In Whitehouse and Khanna’s proposal, titled the Big Oil Windfall Profits Tax, that money would come from levying a per-barrel tax on major oil companies “equal to 50% of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019,” according to a brief of the bill.
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“At $120 per barrel of oil, the levy would raise approximately $45 billion per year. At that price, single filers would receive approximately $240 each year and joint filers would receive roughly $360 each year,” Khanna told USA TODAY.
“If they avoid the tax, that’s less relief for the American public, but that means that their price will come down.”
But, Khanna said, “we haven’t, unfortunately, got Republicans on board with it yet.”
Keystone XL revival?
Many Republican lawmakers are resurrecting calls to expand the Keystone XL pipeline, which they claim would lower gas prices and help the U.S. become even more energy independent.
Biden prevented the expansion in one of his earliest executive orders citing environmental concerns. Keystone XL, which would ship crude oil from Alberta to existing pipelines and then on to the Gulf Coast refineries, would take years to construct and would not be assured to increase U.S. supplies.
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Gas price relief this summer may come on a state-by-state basis.
Already four states – Maryland, Georgia, Connecticut and New York – enacted gas tax holidays to provide temporary relief. (Maryland’s holiday’s expired April 18 and New York’s doesn’t go into effect until June 1.) At least a dozen states have considered implementing one. California, New Jersey and Delaware also are considering sending rebates.
Saving money on gas
“If you can’t remember last time you checked your tire pressure, there’s a good chance it’s low and if you inflate it properly you could save a lot of money on gas,” said AAA spokesman Andrew Gross.
Also, if your car doesn’t require premium gas “then don’t use it,” he said. Conversely, if your car can run on E15, gasoline that uses a 15% ethanol blend, you could save 10 cents a gallon on average, according to the White House. However, it is available only at about 2,300 out of more than 150,000 gas stations across the country,
E15 gas normally isn’t sold during the summer because of air pollution concerns, but the Environmental Protection Agency issued an emergency fuel waiver on Friday to allow it.
De Haan said the “on paper” per-gallon savings from using E15 as opposed to regular fuel may be somewhat overstated since “there may be a slight hit to fuel efficiency.”
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
This article originally appeared on USA TODAY: Are 2022 gas stimulus checks coming as prices rise?
Source: finance.yahoo.com