Did you know that experts expect that gas prices won’t fall below four dollars per gallon in 2022?
Gas prices recently hit a record high cost in the United States at more than $4.30 per gallon.
This is causing many people to worry that the price will continue rising. Since there are many criteria that determine what gas prices are, it’s important to be up to date about what industry insiders are saying.
To help you figure out the answer to the question “when are gas prices going down?”, we’ve created a guide. Keep reading and we’ll tell you everything you need to know.
When Will Gas Prices Go Down? Experts Say a Dip Beneath $4 Won’t Happen Soon
After President Biden announced that he’d ban all Russian oil and natural gas imports to punish the country for its invasion of Ukraine, gas prices skyrocketed. Even though most experts say that gas prices are going to continue to rise during the next few months, different people say different things when they’re asked when will gas prices go back down.
On March 31st the White House announced that the US government would release around a million barrels of oil per day from the Strategic Petroleum Reserve (SPR). This move caused the price per gallon of gas to fall to just over four dollars.
The SPR is a series of subterranean caves that lies along the shores of the Gulf Coast. The US government has been using this space to store crude oil for unexpected situations when it might be needed. Experts say that it’s the world’s most plentiful supply of emergency crude oil.
At around the same time that President Biden made this important announcement, OPEC affirmed that it would continue increasing its production of crude oil.
There is one more important variable to look at if you want to know when gas prices will go down. Consumer demand for gasoline has been decreasing during the last few weeks.
Why Are Gas Prices Rising?
Even though there are many variables that have impacted the rise in gas prices, the main reason is because of Russia’s invasion of Ukraine. Governments around the world responded by putting various economic and political sanctions in place.
Since the USA and the European Union are both major exporters of Russian oil, gas prices quickly skyrocketed after the sanctions were announced. Since the US imports around eight percent of its oil from Russia, these sanctions have had a big impact on the oil supply.
But gas prices were rising before Russia invaded Ukraine. This is mainly due to inflation. Consumer goods are more expensive than they used to be.
Experts agree that inflation will continue to be an issue in the coming year. This means that consumer commodities, including gas, will continue to rise in cost for at least the next few months.
Inflation is making almost every kind of consumer good more expensive, including groceries and cars. The inflation rate hasn’t been higher than it is now since the nineteen seventies.
When consumer goods start costing more, people tend to spend less money on non-essential items so that they can save money. This means people travel less, which decreased the demand for gasoline.
Which State Has the Highest Gas Prices?
Every region of the United States has seen a sudden spike in gas prices during the past few months. But states in the western part of the country such as California have seen the most dramatic rise.
The state’s average price per gallon is more than five dollars and fifty cents. And if you need to fill your tank with diesel it’s going to cost you more than six dollars per gallon. Fortunately, it’s the only state with gas prices that surpass five dollars per gallon.
There are only twelve states in the country where prices have not gone higher than four dollars per gallon. Aside from California, other states that have the highest gas prices are Hawaii, Nevada, Oregon, Washington, Alaska, Illinois, Connecticut, New York, and Pennsylvania.
If you’re looking for the cheapest place in the country to fill your gas tank, consider making a trip to the midwest to states such as Michigan, Iowa, and Minnesota.
Kansas currently has the cheapest gas prices which average around $3.70 per gallon. The most likely reason why prices are cheaper in Kansas is because of the lower gasoline taxes and discounts the state offers on winter-blend gasoline.
If you want to spend less on gas this year, one of the best things you can do is to make use of top car maintenance tips. By making sure you rotate your tires and inflate them properly, you’ll increase your car’s fuel efficiency.
The Influence of Post-Pandemic Gas Demand
When the pandemic started in early 2020, consumer demand for gas sharply fell. Most people cut their driving in half because of lockdowns which prohibited them from leaving their homes. This is why gas cost less than two dollars per gallon in April of 2020.
Since this time the economy has been in process of slow recovery. Once people got vaccinated they started traveling and shopping more often. This meant that they consumed more gas to travel in their cars.
By March of 2021 gas prices were already on the rise. The average cost per gallon was around two dollars and seventy-five cents.
One of the main reasons prices rose was that OPEC and oil-supplying countries slashed their production during the pandemic. This cut the global oil supply by nearly ten percent.
Unfortunately, it took a while for OPEC to start increasing its production once demand started rising again in early 2021. US suppliers made a commitment to increase their production to make up for the decreased oil supply, but it takes time to do this. Therefore, gas prices continued to rise.
If you’re concerned about gas prices and are planning to buy a new car, you should consider making the switch to an electric vehicle.
By doing this, you’ll never have to worry about gas prices again. If you want to learn about the top electric vehicles for 2022, be sure to read this article.
Will Gas Prices Go Up? The Relationship Between Government Policies and Gas Prices
There are many politicians who point their fingers at President Joe Biden for making decisions that create higher gas prices.
They say that the administration’s choice to put the Keystone XL pipeline on hold has contributed to the rise in gas prices. They also say that the administration should be doing more to support gas and oil drilling on public lands.
Despite these claims, experts point out that the U.S. currently produces more oil than it did in 2020.
Even though oil and gas drilling is increasing in the U.S., most drilling companies struggle to get the supplies they need to drill more oil. This includes machinery such as rigs and trucks.
Will the price of gasoline go down?
It is very possible that gas prices will keep rising before they go back down. Many experts suggest that it’s possible the average price per gallon will reach as high as five dollars.
With this being said, there are various factors influencing gas prices. For example, it’s possible that the U.S. will strike a deal with Venezuela to start importing its oil. If this deal goes through then gas prices will go back down.
It’s also important to be aware that the gas prices rising today are still far below peak prices from 2008 if these prices are adjusted for inflation.
In today’s dollars, the price per gallon would have been more than five dollars. Most projections suggest that gas prices will continue to be high for the next several months. This is because inflation is still getting worse and actions against Russia are still in place.
If inflation begins to ease later in the year, it’s possible that gas prices will slowly go down. It’s even possible that more states will have average prices per gallon of less than four dollars.
It’s also important to know that there is currently an auto supply crisis because of a shortage of car chips. This means car prices are higher. Therefore, if you are shopping for a new car and find a good price, it’s a good idea to make the purchase.
When Are Gas Prices Going Down?: The End Might Be in Sight
If you’ve been asking the question “when are gas prices going down?”, it’s important to know that there are many factors that determine fuel prices. If the U.S.A. lifts its actions against Russia, chances are that gas prices will start going down by the end of 2022.
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