If you drive a gasoline-powered vehicle, you’ve noticed the high gas prices at the pump. But what might have slipped your attention is that today’s soaring fuel costs are the highest gas prices in U.S. history. Are you paying more in your area than other Americans?
What are current gas prices in the U.S.?
Gas prices reached an all-time high of $4.331 per gallon on March 11, 2022, AAA reports. However, prices usually fluctuate, and as of March 30, the national average cost per gallon was down to $4.236.
Prices at the pump depend on several factors. The cost of crude oil drives 55% of the price, while 14% comes from the refinery process. Marketing and distribution costs account for 16%. And taxes make up the final 15%, AAA national spokesperson Andrew Gross told How Stuff Works.
As with other commodities, the supply-and-demand of crude oil on the world market does the most to drive the cost of a barrel of oil. Recent instability in Ukraine and uncertainty around demand based on the pandemic caused the world’s oil producers to scale back production, lowering the supply.
In addition, the pandemic and resulting worker shortages affected refineries and transportation networks, reducing productivity and increasing overall costs. And those entities pass the costs on to the consumer at the gas pump.
What was the highest gas price in U.S. history?
This month’s $4.331 per gallon isn’t the highest compared with gas prices in July 2008 when adjusted for inflation. The national average that summer equates to $5.30 per gallon in today’s dollars. The lowest national average price since 1929 was in 1998 and amounts to $1.86 in today’s dollars.
Why were gas prices so high in 2008?
According to Fortune, the July 2008 spike in gas prices resulted from several factors. One was economic globalization fueling increased demand from developing countries. Others were stagnant oil and gasoline production in the U.S. and abroad, along with financial speculation of a looming recession in the U.S. economy. And ongoing instability in the Middle East also caused oil and gas prices to increase steadily over the decade from 1998 to 2008.
Where is the most expensive gas in the U.S.?
California has the highest gas prices in the U.S., averaging $5.85 per gallon at the pump on March 21, 2022. Conversely, Kansas enjoyed a relatively inexpensive $3.767 per gallon the same day. California’s high prices result from the state’s location far from refineries, which typically cluster in the Southern United States; relatively high state gas taxes of 51.1 cents per gallon; and special fuel blends due to environmental requirements.
As bad as it sounds for Golden State drivers, much of the rest of the world is worse off. On March 14, 2022, gas prices in Germany hit $9.12 per gallon, and drivers in the Netherlands paid $9.20 per gallon. But those prices pale in comparison to Hong Kong, where the price per gallon soared to $10.98.
Oil-rich countries such as Iran, Libya, and Venezuela have seen the lowest gas prices, from only 10 to 19 cents per gallon during the same period.