{"id":1633,"date":"2022-03-11T13:15:17","date_gmt":"2022-03-11T13:15:17","guid":{"rendered":"https:\/\/worabia.com\/news\/2022\/03\/11\/3-reasons-why-gas-prices-are-so-high-and-when-they-might-come-down-2\/"},"modified":"2022-03-11T13:15:17","modified_gmt":"2022-03-11T13:15:17","slug":"3-reasons-why-gas-prices-are-so-high-and-when-they-might-come-down-2","status":"publish","type":"post","link":"https:\/\/worabia.com\/news\/world-news\/united-states\/1633\/","title":{"rendered":"3 reasons why gas prices are so high \u2014 and when they might come down"},"content":{"rendered":"
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Gas prices are setting a record<\/span> almost daily, causing financial pain to the pump for millions of Americans. But it also raises questions about why fuel is so expensive – and who’s to blame. Consumers are also wondering when they can see some relief.<\/p>\n

Unsurprisingly, rising gas prices have a very real impact on household budgets: A typical household may have extra cost $ 2,000 this year<\/span> simply because of the higher cost, according to a Wall Street estimate. On Friday, gas prices peaked again, averaging $ 4.33 a gallon, according to the AAA. Earlier this week, the previous record was $ 4.10 a gallon in 2008, just before the financial crisis. <\/p>\n

Suddenly, fuel prices are a hot topic, with households anticipating higher gas costs and cutting spending in other sectors. Some Americans already drive less because of higher prices. One in three adults says he reduced his car usage last month, with most blaming the gas pump self-adhesive shock, according to the Morning Consult. <\/p>\n

So how did we get here? Today’s stratospheric gas prices are rooted in COVID-19<\/span> pandemic, with the war in Russia in progress Ukraine<\/span> pushing prices higher in recent weeks, said Patrick De Haan, head of oil analysis at GasBuddy.<\/p>\n

“The overall aspect is that supply and demand have changed,” he told CBS MoneyWatch. “Everything was overturned by COVID. If it had not happened, we would be in a different situation.”<\/p>\n

Here are three reasons why gas prices are soaring – and when experts think they could fall. <\/p>\n

Post-pandemic demand for natural gas<\/h2>\n

When the pandemic first hit the United States in March 2020, demand for gasoline plummeted as Americans were sheltered in their homes due to nationwide lockdowns. The standard driver cut his driving in half, according to the AAA.<\/p>\n

This sharp drop in demand caused gas prices to fall to an average of $ 1.94 per gallon in April 2020. <\/p>\n

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For all those “special” graphs that try to explain the rise # Gas prices<\/a> since 2020, I have made the actual chart that explains the gas prices for you. pic.twitter.com\/LhydcLeY6T<\/a><\/p>\n

– Patrick De Haan \u26fd\ufe0f\ud83d\udcca (@GasBuddyGuy) March 10, 2022<\/a><\/p><\/blockquote><\/div>\n<\/figure>\n

But as the economy recovered – as vaccines were released, making Americans feel safer traveling and shopping – people continued to drive. As demand increased, gas prices also began to rise. By March 2021, the average price per gallon of gas was $ 2.82, up 45% from the pandemic low. <\/p>\n

Cuts in oil production<\/h2>\n

When demand for gas and oil plummeted during the pandemic, OPEC and oil-producing countries such as Russia production cut<\/span>, reducing it by 10 million barrels unprecedented. To put it in perspective, this represents 10% of the global supply. <\/p>\n

But as the global economy recovered from the pandemic, OPEC was slow to increase production, De Haan said. “We are close to consumption levels before COVID-19, but production is still lagging behind. OPEC did not start increasing production until July 2021. It was already too late – it was far behind the curve.”<\/p>\n

U.S. producers, meanwhile, said they were boosting production, but warned that supplies could be slow to hit the market and pump prices could fluctuate, Politico reported.<\/p>\n

US sanctions on Russia affect the world market<\/h2>\n

In this context of steady rise in prices, Russia’s war in Ukraine has caused a rapid rise in gas prices. President Biden on Tuesday announced a ban on US oil and gas imports from Russia<\/span>targeting Russia’s main source of revenue in the midst of the conflict. <\/p>\n

The US imports less than 10% of its oil and gas from Russia. So why are prices so high in the US if the nation is not dependent on Russia for fuel? The rise in gas prices is due to the world’s largest oil market, De Haan said. <\/p>\n

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