Gasoline prices jumped even higher to over $4 a gallon, the highest price American motorists have faced since July 2008, as calls for a ban on Russian oil imports mount.
Gas station prices have been rising long before Russia invaded Ukraine and have risen faster since the start of the war. The U.S. national average per gallon of gasoline rose 45 cents a gallon last week to top $4.06 on Monday, according to the Auto Club AAA.
“I’m considering walking to work,” said Asia Joseph, who just paid $4.29 a gallon at a BP gas station in Brooklyn, New York. “This is the first time I’ve filled my tank in about 10 days.”
The price of regular gasoline on Sunday topped $4 a gallon for the first time in nearly 14 years and is now up nearly 50% from a year ago.
The price is even higher in Europe, averaging €1.75 per liter last week, according to the European Commission, equivalent to $7.21 per gallon.
GasBuddy, which tracks prices to the level of gas stations, said on Monday that the US is likely to break the record price of $4.10 a gallon, but that doesn’t account for inflation. In today’s conditions, the record price will be about $5.24 adjusted for inflation.
“Forget the $4/gallon mark, the country is about to set a new all-time high and we could get closer to the $4.50 national average,” said GasBuddy analyst Patrick De Haan. “We have never been in a situation like this before, with this level of uncertainty. … Americans will feel the pain of rising prices for some time to come.”
Energy prices are contributing to the worst inflation Americans have seen in 40 years, far outpacing wage growth. Consumer prices jumped 7.5% in January from a year ago, and analysts are forecasting a 7.9% increase when the government releases February data later this week.
Oil prices soared early Monday before retreating. Benchmark US oil rose to $130 a barrel the day before before slipping to around $119, up 3%, in the afternoon. The world price soared to $139 before dropping to about $123 a barrel. Major US stock indexes fell more than 2%.
The United States is the world’s largest oil producer, ahead of Saudi Arabia and Russia, but it is also the largest consumer of oil, and it cannot meet this overwhelming demand with domestic oil alone.
The US imported 245 million barrels of oil from Russia last year — about 8% of all US oil imports — compared to 198 million barrels in 2020. That’s less than what the US receives from Canada or Mexico, but more than it imported last year from Saudi Arabia. .
Russia’s increasingly vicious assault on Ukraine has heightened calls to cut Russia off from the money it receives from oil and natural gas exports. Europe is heavily dependent on Russian gas.
President Joe Biden was reluctant to ban Russian oil, fearing it could fuel inflation ahead of the midterm elections this November.
Many Republicans and a growing number of Democrats in the House and Senate, including Speaker of the House Nancy Pelosi of California, supported the ban on Russian oil as a way to put more pressure on Russian President Vladimir Putin. The White House is not ruling out a ban, and Secretary of State Anthony Blinken said Sunday that the United States and its allies are discussing a ban “while making sure there is still adequate oil in the world market.”
Talk of a ban on Russian oil has led US officials to consider other sources that are currently limited. In what was supposed to be a secret trip, senior US officials visited Venezuela over the weekend to discuss the possibility of easing oil sanctions on the world’s largest crude oil exporter.
Ronnie James, an Uber driver in Brooklyn, wants the government to do something to lower prices – get oil from Venezuela or get more from the Strategic Petroleum Reserve.
“The people who build the wealth of this nation every day need a break,” he said.
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Contributions were made by Associated Press correspondents Julie Walker of Brooklyn, New York, and Chris Rugaber of Washington.