It’s hard to avoid the headlines about skyrocketing gasoline prices. With a forecasted recession on the horizon and sky-high inflation raising the cost of living, it might seem hard to find much good news these days. However, one gas station owner recently made headlines for lowering his prices.
Why are gas prices are so high?
Gas prices have been much higher than usual for a while now. There are several reasons for this, Vox notes. The first is that the costs to refine crude oil have been steadily rising for a while. Refinery closures have put more pressure on those remaining open. And even though the remaining refineries have increased capacity, they must work continuously to fulfill rising demand.
The second is that crude oil prices are quite high. Western countries sanctioned Russia’s oil exports when Russia invaded Ukraine, limiting the gas supply and driving prices up. The U.S. didn’t get much oil from Russia, but many other Western countries did. However, the sanctions have adversely affected global markets, with downstream effects on the average U.S. driver.
Further, the cost of transporting gas has gone up. Tankers themselves need gas to get gas to retail locations. It’s also important to understand that they resupply their gas reserves roughly every few days for the market price at the time. As a result, they could buy gas at the equivalent of $4.50 a gallon and sell it for a loss in a day or two. Or a sudden spike in prices could mean significant profit.
How a Phoenix gas station owner sacrificed profit to help others
With rising prices driving inflation to an eye-popping 9.1%, many working American families have been having a tough time making ends meet lately. Many workers have had to make hard choices about what bills to pay and what expenses to cut to ensure they cover the essentials. And unless they own an EV, keeping the gas tank full is essential.
According to AZ Family, one Phoenix gas station owner, seeing the hardships his customers have been experiencing, decided to do something about it. In June, when gas cost him $5.67 a gallon, Jaswiendre Singh began selling it for $5.19 a gallon — 47 cents less than the purchase price.
Despite losing $500 daily, Singh was determined to help his customers by lowering prices. He had dropped his gas prices in March by 10 cents a gallon and then reduced them further.
In an interview with AZ Family, Singh shared that his parents taught him the importance of helping others. He mentioned he and his wife have been working harder to sell items inside the station to offset the losses. But he also noted that given how many people were struggling, his aim wasn’t to make profits but to help others.
Are high gas prices here to stay?
The people in Singh’s community aren’t the only ones who’ve faced high gas prices. Consumers across the globe have been finding it more expensive to fuel their vehicles. The cost of air, train, and bus travel has also increased thanks to rising fuel costs. In fact, retail prices have been rising across the board to account for higher distribution costs.
In a bit of good news, the average national gas price dropped a bit in July. According to CNET, some economists have pointed to the Biden administration’s release of the nation’s strategic petroleum reserves as a factor, as doing so has helped increase the supply on the market. Demand has also dropped because of the high prices. However, it remains to be seen how far gas prices will drop, given that most of the underlying causes remain.
In other good news, high gas prices aren’t depressing the travel industry — a sector decimated by the pandemic. Fourth of July air travel topped pre-pandemic levels, CBS News reports. And according to Reuters, despite gas prices, road travel is approaching 2019 levels this summer. Though many families are struggling, others are doing well and are not shy about spending money. More money in circulation can help an economy ravaged by two years of stifled demand. But given the fundamentals and the nation’s slow shift away from fossil fuels, gas prices will likely remain high for a while.