This year, high demand for crude oil and limited supply drove up gas prices. There are other international forces at play even though the Federal Reserve has increased interest rates four times so far in 2022 and plans to do so again soon to push prices down.
Throughout the epidemic, the availability of crude oil, the natural resource required to make gasoline and diesel fuel, has seen significant fluctuations. Major oil-producing firms reduced their oil production when Covid-19 initially spread globally and fewer people were on the roadways.
The largest fuel pipeline in the country, the Colonial Pipeline, was the target of a cyberattack in April 2021 that knocked it offline for six days. Before Memorial Day 2021, average petrol prices had risen above $3 countrywide as a result of the closure. In October 2021, a crucial fuel pipeline that feeds the southeast with fuel burst and spilled, and subsequent repairs were hindered by flooding and heavy rain.
A contributing cause to these problems is the conflict in Ukraine. Due to its invasion of Ukraine, sanctions have been placed on Russia, which supplies around 10% of the world's oil supply. Russian oil imports are now fully prohibited in the United States, which also means that the remaining world supply is being constrained.
The combined consequences of these scenarios mean states all over the country continue to see elevated gas prices. For example, California’s average gas price per gallon is $5.27, and Illinois’ price currently sits at $4.11.
OPEC, an alliance of oil-producing countries, says it will reduce its oil production next month as it anticipates a global economic slowdown that could stymie demand. The cut in production could potentially stall the recent gas prices decreases
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