US drivers are paying more than $ 100 to fill their gas tanks in parts of the country as pump prices jump due to rising oil prices after Vladimir Putin ordered on invasion of Ukraine.
The average national price of unleaded gasoline reached $ 3.61 on Monday, eight cents more than the average of $ 3,532 a week ago.
In addition, it is 25 cents higher than the average of $ 3,356 a month ago and nearly 90 cents higher than the average of $ 2,717 a year ago, according to the AAA gas price index.
Californians are paying the highest prices, handing out an average of $ 4,827 per gallon of unleaded gas since Monday, up about eight cents from an average of $ 4,741 a week ago.
That’s 19 cents from an average of $ 4,637 a month ago and $ 1.14 from last year’s $ 3,681, the AAA said.
“Over a hundred dollars for my truck and I have a car that gets a lot of gas and costs me $ 60 to refuel, so it’s expensive,” said Jim Brinkerhof of Santa Clara County. ABC 7.
American drivers see that the prices of gas stations are gradually rising due to rising oil prices. The map above shows which states have the highest average prices and which have the lowest
The average national price of regular gasoline reached $ 3.61 on Monday, nearly 90 cents from a year ago, according to the latest AAA data
The rise in prices comes after Vladimir Putin ordered an invasion of Ukraine and President Joe Biden announced broad sanctions against Russia. Above is a gas station in Santa Clara County, seen on Thursday
Patrick De Haan of technology firm GasBuddy has warned that Russia could respond to sanctions against its banking system by cutting off oil supplies. Last year, Russia accounted for 21% of all U.S. gasoline imports, according to Forbes.
“Russia can just say, ‘Hey, we’re just going to stop the oil.’ And this could lead to a spike in oil prices at a time when demand for petrol continues to recover as the number of COVIDs declines, “he told ABC 7.
De Haan said that no matter how long the crisis in Ukraine lasts, gas prices may remain higher for some time.
“It will take us maybe a year or two to get back to normal. And for all these problems to fade in the background before we start to see more than what Californians are used to, that’s $ 3.4 a gallon, “he said.
Californians are bearing the brunt of the price jump, earning an average of $ 4,827 as of Monday. Above is a man pumping gas at a Los Angeles station on Friday
Russia is the second largest exporter of oil after Saudi Arabia and is the world’s largest producer of natural gas. A local citizen stands among the rubble of his house after Ukrainian shelling of territory controlled by pro-Russian militants in eastern Ukraine on Thursday
GasBuddy’s Patrick De Haan warns Russia could respond to sanctions by cutting off oil supplies
After the invasion last Thursday, Biden called on US oil companies not to “exploit” Russia’s attack by raising prices for higher profits.
The president drew attention to the rapidly escalating crisis in the White House last Thursday after meeting with colleagues from the Group of 7 Economic Powers.
Biden did not relent after the Russian invasion of Ukraine last Thursday, rejecting Russian President Vladimir Putin as an international “pariah” and announcing a number of new sanctions designed to “impose significant costs on the Russian economy, both immediately and extraordinarily”. ‘
Russia-based energy companies have been particularly excluded amid fears that Putin’s invasion will disrupt the world’s oil and gas supply chain.
Russia is the second largest exporter of oil after Saudi Arabia and is the world’s largest producer of natural gas. The European Union currently relies on Russia for 40 percent of its natural gas.
While acknowledging that the blow to the Russian economy will have an impact on the pockets of American citizens, Biden also warned US companies not to increase financial tensions in an effort to maximize profits.
“As we respond, my administration is using the tools – every tool at its disposal – to protect American families and businesses from rising gas station prices,” Biden said.
He said his government was “taking active steps” to reduce fuel prices.
President Joe Biden urges US oil companies not to “exploit” Russia’s attack by raising prices for higher profits
Ukrainian servicemen board armored personnel carriers on the road in Donetsk region, eastern Ukraine, on Thursday
Emergency workers work at the site of the crash of a Ukrainian military plane south of Kyiv on Thursday
Biden stressed that the international community supports these efforts.
“We will limit Russia’s ability to do business in dollars, euros, pounds and yen,” he said. “Between our actions and those of our allies and partners, we believe we will cut off more than half of Russia’s high-tech imports. We will strike through their ability to modernize their army.
In particular, the United States targeted Russia’s largest bank, Sberbank, which holds nearly a third of the total assets of Russia’s banking sector, and fully sanctioned Russia’s second-largest bank, VTB. Both institutions are now completely disconnected from the US financial system, which includes processing payments through the US financial system.
The United States also cut off 13 large state-owned companies to raise money from the US market.
But Isaac Boltanski, director of political research at BTIG, said that despite its efforts, the United States did not have “very good opportunities” to fight inflation and rising gas prices.
“I’m sure the White House will do everything it can, but I’m just not sold on any of the options they really have to help consumers,” he said. Yahoo Finance Live.
Biden also suggested that the United States could count on a strategic oil reserve after the White House released 50 million barrels of reserve oil in November in a coordinated effort with other countries to reduce high gasoline prices.
“We are already at the lowest level of reserves in the SPR since 2002, so we are already facing restrictions there, and frankly, it has not had that much of an impact,” Boltanski said.
Photo taken near Kyiv shows the remains of a downed Russian attacking helicopter with a soldier parachuting from it (left of the frame)
In the United States, more than 70 percent of retail goods are transported by truck, which means that rising gas prices increase the cost of selling a wide range of products – costs that will inevitably be passed on to consumers.
In addition, many types of plastic packaging and labels are produced from petroleum by-products, which means that persistently high oil prices can have a wide impact on the price of a huge range of goods.
Potential misery comes on top of already raging inflation, which reached a 40-year high of 7.5 percent in the United States in January.
Meanwhile, a key alternative measure for inflation in the United States has reached its highest level in four decades. Federal data on Friday showed that the Consumer Price Index (PCE) rose 6.1 percent in January from a year earlier, the biggest annual increase since February 1982.
Fed President Jerome Powell is now facing difficult decisions on whether to continue raising interest rates to fight inflation as speculation grows that the United States may face a stagnant environment if the crisis in Europe slows economic growth. .
The so-called core PCE, which excludes volatile food and energy prices, rose 5.2 percent in January from a year earlier, the biggest increase since 1983.
The PCE’s core price index is the preferred measure of inflation by the Federal Reserve for its flexible target of 2 percent and is an additional measure to the more widely known consumer price index, which reached a 40-year high of 7.5 percent last month.
The Federal Reserve is expected to start raising interest rates in March to curb inflation, with economists expecting up to seven raises this year.
But there are now fears that the economy, hit by high oil prices, may not be in a bad position to withstand the tightening of monetary policy.
“The implications of the evolving situation in Ukraine for the US medium-term economic outlook will also be a consideration in determining the appropriate rate of interest rate hike,” Cleveland Fed President Loretta Mester said Thursday.
The risks may be as obvious as high oil prices, which weigh on consumer spending and raise inflation even more, or as unknown as how Russia can respond to US sanctions.