Gas Prices Near $4 Again, Continuing 2-Week Climb

Topline

Average U.S. gas prices continue to climb back up, increasing for the 14th-straight day Saturday as ongoing issues from the war in Ukraine and Hurricane Ian impact supply – and higher prices at the pump may dampen any optimism about inflation calming.

Key Facts

The average price of a regular gallon of gas was $3.80 Saturday, according to AAA, a 13-cent increase from its eight-month low last week.

Gas is still significantly less expensive than it was earlier this year thanks to an unprecedented 99 consecutive days of falling prices, down 26% from its June high of $5.14 after energy prices exploded in the wake of Russia’s invasion of Ukraine.

Gas is most expensive in California, where gas is $6.36 gallon—a whopping 68-cent increase over the last week—while Nevada ($5.48), Oregon ($5.41), Washington ($5.28), Alaska ($5.29) and Hawaii ($5.23) are the only other states over $5.

Gas remains the cheapest in the Southeast, and the cheapest gas can be found in Mississippi ($3.07), Texas ($3.10), Louisiana ($3.11) and Georgia ($3.18).

Key Background

The average price for a gallon of gas is 19% higher Saturday than it was a year ago, according to AAA. Gas prices skyrocketed between March and June as the cost of crude oil spiked in response to the war of Ukraine, quickly surging past its prior record high of $4.11 in 2008. Soaring prices at the pump contributed to inflation hitting its highest level in the U.S. in over 40 years, but inflation has not dipped as much as anticipated even as gas prices have dipped.

Tangent

Many expect the Federal Reserve to pursue even more aggressive interest rate hikes to address inflation, leading to the stock market’s worst month since March 2020. Several other factors contributing to historic inflation have cooled recently, with the cost of lumber and shipping down more than 70% from their respective peaks earlier in the pandemic.

Further Reading

Inflation is cooling thanks to gas prices, but many things still cost a lot more (NPR)

U.S. Gas Prices Rise For First Time In 100 Days (Forbes)