Gas Prices Soar To New Record Highs, Adding To Inflationary Pressures

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Gas prices reached a new $4.37-a-gallon record on Tuesday, four cents above the previous high of $4.33 from March 11. The jump takes place amid increasing talk of an economic recession in the U.S. caused by the impact of inflation.

Gas Prices Hit Fresh High

As reported by CNN Business, prices at the pump have reached a new record by increasing by 17 cents in the past week. The release of oil reserves in April as a way to tail off increasing prices has been proved to be ineffective in the long run, as they pushed average national prices down to $4.02 a gallon.

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Russia’s invasion of Ukraine has nothing but skyrocketed oil prices, with the price at the pump soaring by 25% since the war started back in February.

The U.S. Energy Information Administration said that adjusted-for-inflation real gas prices would have to climb over $5.08 per gallon to surpass the 2008 mark.

AAA said in a blog post, “Increasing gas demand and rising oil prices have pushed pump prices higher. Pump prices will likely face upward pressure as oil prices remain above $105 per barrel.”

Outlook

Patrick De Haan, head of petroleum analysis at GasBuddy, said in a Tuesday news release: “There’s little, if any, good news about fuel prices heading into summer… Liquid fuels have turned into liquid gold. Russia’s oil increasingly remains out of the market, crimping supply while demand rebounds ahead of the summer driving season.”

The new jump in gas prices will not be included in Wednesday’s hotly-anticipated inflation report, while some experts agree that they are bound to get higher.

According to the New York Post, oil prices edged near $110 per barrel during the first week of May since the European Union started considering a possible ban on Russian energy shipments in response to the Ukraine war.

“A possible embargo further upended an energy market that was already contending with supply concerns and disruptions related to the COVID-19 pandemic.”

Patrick De Haan added, “While motorists filling with gasoline have seen a slight rise in prices, diesel’s surge will be a double whammy as diesel prices will soon be passed along to retail channels, further pushing up the cost of goods.”