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Gas prices soar to eight-month high

A gas pump. (Unsplash)
July 28, 2023

The average price of a gallon of gasoline in the United States reached an eight-month high Friday, marking an increased burden for American consumers.

The average price for a gallon of regular gas soared to $3.73, while diesel prices rose to $3.97, according to AAA. This alarming surge surpasses the highest prices experienced since November 22 of last year.

A spike of over 20 cents has been observed in the past week alone in states such as Iowa, Florida, and Indiana, with 16 other states witnessing a rise of at least 15 cents, according to NBC News. With this steep increase, some experts suggest that the prices are set to rise even higher.

According to analysts, the escalating prices are a result of decreased oil production and several refinery outages. Notably, Saudi Arabia, a key player in global oil markets, announced earlier this month that they plan to reduce oil production by one million barrels a day in July and August, aiming to aid “the stability and balance of oil markets.”

Following these reductions, the price of a barrel of oil surged over $80.

Discussing the link between oil prices and gas prices, Gas Buddy petroleum analyst Patrick De Haan told Barron’s, “There’s no magic formula to determine the exact impact on gas prices, since factors such as refineries make that relationship more murky.”

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De Haan highlighted the changing dynamics in the industry since the Covid-19 pandemic.

“Refining capacity has been really the elephant in the room that has caused gas prices to have less of a direct relationship with oil since Covid shut down a significant amount of refinery capacity,” he said.

De Haan warned on Twitter that Americans might see the national average for gas prices approach $4 per gallon due to potential storms targeting the Gulf.

This level of price increase was last seen in the U.S. when the cost of a regular gallon reached an unprecedented $5.01, and diesel peaked at $5.81 during the summer last year.

According to The Daily Wire, the recent surge in gas prices comes as President Joe Biden’s administration remains under scrutiny over its energy policies, including the withdrawal of approval for the Keystone Pipeline and the restrictions on oil drilling on federal lands.

When Biden assumed office, the national average for gasoline was $2.38 per gallon, a figure that has since soared amid the ongoing geopolitical tensions between Russia and Ukraine and the Biden administration’s push for the adoption of “green energy” in the United States.

This news article was partially created with the assistance of artificial intelligence and edited and fact-checked by a human editor.