The price of gasoline in the United States has been climbing as markets are in turmoil following Russia’s invasion of Ukraine.
President Joe Biden signed an executive order on March 8, 2022, banning Russian oil imports. Though Russia accounts for less than 10% of U.S. energy imports, he warned the decision would drive up already rising gas prices.
In an effort to allay supply issues, the Department of Energy announced the U.S. would release 30 million barrels of crude oil from its strategic petroleum reserve. Other members of the IEA also committed to releasing 30 million barrels, collectively.
Still, the price of gasoline in the U.S. hit all-time highs. According to the website Gasbuddy, as of March 11, the price of a gallon of regular gas in the U.S. was $4.35 on average. Previously, the highest price recorded was $4.11 in July 2008, just before the Great Recession caused prices to tumble.
Here are some fast facts about gasoline that you may not know, despite the various headlines commenting on the price increases:
- Gasoline prices are determined largely by the laws of supply and demand.
- Gasoline prices cover the cost of acquiring and refining crude oil, as well as distributing and marketing the gasoline, in addition to state and federal taxes.
- Because consumers are slow to respond to changes in gasoline prices, they can move rapidly to balance supply and demand.
- Gas prices are so noticeable that their rise often sparks arguments about who is to blame.
We cover more on gasoline prices and inflation in our most recent webinar, “Russia-Ukraine War: Investor Impact & 5 Ways to Keep Your Financial Cool.”
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