Why are gas prices going up?

One of the key causes of what has become the biggest inflation in a generation has been energy expenses. The price of a barrel of U.S. benchmark crude oil just hit a seven-year high of $87 a barrel, a faint 36 percent increase since December 1.

This price increase halted a nearly equal drop that began in late October. Consumers have been pummeled by the excessive volatility of oil because it has a direct effect on the prices of gasoline and home heating oils. According to AAA, a gallon of standard gas costs $3.33 right now, up from $2.40 a year ago.

In January, inflation increased at its fastest rate in over 40 years. However, not all prices are rising at the same rate. Oil is a major contributor to the uptick. Prices for gasoline and jet fuel have risen to their highest levels since 2014. According to financial journalist Matthew C. Klein, rising oil costs alone can explain for approximately 30% of the "extra" inflation witnessed in the United States since the pandemic began.

High gasoline prices have disproportionately harmed public-facing workers, many of whom are lower-income commuters who must drive to their places of employment. Office workers who have had the chance to work largely or entirely from home, on the other hand, have experienced less of a pricing impact.

At same time last year, the average family spent around $30 per week on gasoline. According to the National Energy Assistance Directors Association, they now spend around $43 per week for the same quantity of fuel. This comes at a time when households are grappling with inflation in other parts of the economy and a child tax benefit that recently expired.

The viral pandemic's ever-changing state has wreaked havoc on both supply and demand. As a result, energy has been subjected to wild price volatility.

Other factors have also contributed to the high cost of gas. Most analysts believe the chances of any respite coming soon are slim. Most immediately, Russia's expansion of its military position near Ukraine's border has stoked worries of an impending invasion and the resulting disruption of global oil supply.

Russian-Ukraine tensions

Russia provides much of the world's oil and gas, a supply that could be cut off if tensions rise to the point of invasion (which has already occurred).

Following Russia's invasion of Ukraine, gas prices are projected to rise much further. According to a senior Defense Department official, Russia has gathered all of its forces in preparation for a full-scale invasion of Ukraine. The attack began just after sunrise on Thursday.

President Joe Biden ordered sanctions against Russia for a "flagrant violation of international law" after Russian President Vladimir Putin dispatched soldiers to eastern Ukraine earlier this week.

According to AAA, the national average gas price in the United States is $3.54 per gallon as of Thursday, up from $2.65 a year ago. Experts predict that petrol prices will rise to $4 per gallon. Meanwhile, Brent crude oil temporarily surpassed $100 per barrel in London on Thursday for the first time since 2014.

According to Kevin Book, managing director of Clearview Energy Partners, Russia supplies 30 to 40% of Europe's oil, gas, and coal. According to him, Russia's exports produce 4% to 5% of the world's energy in any given year.

“So what does the world do if you have a cutoff of some significant amount of that sort of 5%?” Book said. “Well, the price goes up everywhere.”

Experts are concerned that the confrontation between Russia and Ukraine will disrupt oil supply in the region, causing gas prices to rise. According to Tom Kloza, chief global analyst for the Oil Price Information Service, Russia is the world's second-largest oil producer, trailing only the United States.