The national average for a gallon of regular gas blew past its historic high mark to reach $4.173 cents Tuesday, and diesel is trending right along with it, AAA reports.
The previous all-time average high for a gallon of regular gas was $4.103 set during the Great Recession in 2008.
The trigger for the fuels spike — diesel on Tuesday was averaging $4.755 per gallon, still below the all-time record of $4.845 also set in 2008 — is the West’s sanctions on Russia for its invasion of Ukraine. Russia supplies about 10 percent of the world’s crude oil.
“Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious. That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “It’s a dire situation and won’t improve any time soon. The high prices are likely to stick around for not days or weeks, like they did in 2008, but months.”
De Haan predicts the cost of a gallon of regular gas nationally will rise to $4.25 per gallon and perhaps as high as $4.50 per gallon.
“Make no mistake,” he said during a Facebook report. “Much of what we’re seeing here is because of sanctions on Russia.”
On Tuesday, President Joe Biden announced that the United States will completely ban imports of Russian oil, natural gas and coal. The website Politico announced Great Britain will follow, with a gradual phase-out of Russian oil and gas purchases.
“Today I am announcing the United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian oil and gas and energy,” Biden said. “That means Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin’s war machine.”
It may do little to dull the pain at the pumps, but the Rio Grande Valley continues to trend below the national average, with the cheapest prices for a gallon of regular gas running around $3.50 per gallon.
“Russia is getting quite desperate, they are issuing massive discounts on their oil in order to attract buyers, that is still not having a full impact, or I should say it’s not having much impact on who’s buying Russian crude oil at this point,” De Haan said prior to Biden’s announcement. “Global consumption is nearly 100 million barrels a day. The problem is that Russia is a significant producer of about 10 million barrels per day of oil production, and suddenly with the loss of Russian oil, the balance has been significantly tipped in a way that we have never fully seen before.”
All of this, particularly the price of diesel, is likely to create even more inflationary pressure on the American consumer.
“Keep in mind, that’s going to affect everything from food to lumber, it is the fuel of commerce in the country,” De Haan said. “Jet fuel prices are elevated as well.”
The highest state average gas price as of Tuesday was in California, where a gallon of regular was going for $5.444, AAA reported.
