Pain at the pump: Gas prices rising to levels not seen for over a decade; here's what you need to know
PHOENIX - Americans are feeling the impact of the ongoing Russia-Ukraine war as gas prices are rising to levels not seen for over a decade, according to officials with AAA.
Here's what you need to know as drivers continue to feel the pain at the pump.
How high are gas prices in the U.S.?
According to the AAA website, the national average price for a gallon of regular rose to an all-time high of $4.331 on March 11. Since then, it has slightly decreased to $4.30, as of March 16.
However, drivers in different states are paying different prices for gas. Drivers in Texas, for example, can expect to pay around $3.97 per gallon of regular gas, while drivers in California can expect to pay around $5.77 for each gallon of regular, the most expensive in the U.S.
"It’s unfortunate we’re seeing prices as high as they are because it’s really impacting a lot of families," said Aldo Vasquez with AAA Arizona.
During the same time in 2021, officials with AAA say the national average price for a gallon of regular is $2.87.
What about diesel?
As of March 16, AAA is showing a national average price for diesel at %5.104 per gallon. The record price is $5.135, which was set on March 12, 2022.
As with gas prices, diesel users in different states are paying different prices for the fuel. As of March 16, Colorado has the lowest average price for diesel, at $4.648 per gallon, while California has the highest average price, at $6.266.
Gas prices near me: Check Arizona average prices by county
What's causing the big price increase?
The real reasons behind the recent increase in gas prices are complicated.
Read more: The complicated reasons gas prices are so high – and what we can do about it
When the U.S. and much of the world shut down for the pandemic, driving and travel cratered – and with it, the demand for oil and gas. Gas prices sharply dropped, so the oil producers cut way back on production.
Then, as the pandemic eased and people who had saved up their money were hungry to travel after being pent up for so long, demand shot way up. But it takes time to ramp back up production and supply.
So crude oil, which had dropped to $30 a barrel during the pandemic, shot up to $80 per barrel.
Then, oil prices continued to rise during the run-up to the invasion of Ukraine, with fears that Russia, as one of the world’s largest oil producers, would disrupt the market. And they have remained high as the invasion led to global sanctions.
What about the Keystone Pipeline, and those oil permits that President Biden paused?
While some Republicans have blamed rising gas prices on President Joe Biden for canceling the Keystone XL pipeline extension and for pausing new permits for extraction on public land, neither one of things have any direct bearing on the rising gas prices we are seeing today.
The Keystone Pipeline extension would have funneled more Canadian oil to refineries on the Gulf Coast of Texas, where much of the refined oil would then be exported. But the pipeline extension was never built; its parent company canceled the project after President Biden revoked its permits in one of his first actions after taking office.
According to TC Energy’s official announcement from 2020, the pipeline was not expected to enter service until 2023 – meaning even if Biden had not canceled it, it still would not have been in play this year.
While President Biden did pause new oil extraction permits on public land, he also still managed to approve more permits than President Trump did a year into his term. In addition, there are some 9,000 approved permits going unused – that’s some 23 million acres’ worth of approved leases going unused.
In December, Biden’s secretary of energy, Jennifer Granholm, told the oil gas and oil lobby, "Please take advantage of the leases that you have. Hire workers, get your rig count up."
How much oil did we import from Russia?
According to a report from the Associated Press, the U.S. imported 245 million barrels of oil from Russia in 2021, representing about 8% of all U.S. oil imports and an increase from 198 million barrels in 2020. That is less than what the U.S. gets from Canada or Mexico, but more than the country imported in 2021 from Saudi Arabia.
President Biden has since banned import of Russian oil as a result of the Ukraine invasion.
"We're banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be accepted at U.S. ports," the president announced.
President Biden himself also acknowledged that Americans will feel the pain at the gas pump.
"Defending freedom is going to cost," President Biden said.
We produce oil, right? Why are we importing from other places?
It's true the U.S. does produce crude oil. In fact, according to the AP, the U.S. is the world's largest oil producer, even ahead of Saudi Arabia.
According to figures from the U.S. Energy Information Administration, the U.S. produced 11.185 million barrels of oil per day in 2021.
However, the U.S. is also the world's biggest oil consumer, and the country can't meet the demand with domestically-produced oil alone. Figures from the EIA show the U.S. consumed 19.78 million barrels of oil per day in 2021.
How are high gas prices affecting couriers and rideshare drivers?
In Arizona, Braden Rader's job involves delivering parts to mechanics. His courier job involves a lot of driving, translating into a lot of gas.
"It makes it hard to do this business in general," said Rader. "I love what I do, but my profit margin is being cut into so hard because of the gas prices."
Rader says while he loves his job, he will need a new one soon enough if gas prices keep climbing past already record highs.
"I think that for workers like me that do delivery driving, it makes it almost impossible because they’re not willing to compensate for a higher wage, so it’s all coming out of my pocket," said Rader.
Rideshare drivers are also feeling the impact from high gas prices.
"I just put $63 in my car. They used to cost $40. So wish these politicians would come down to Earth and help us out," said Ronnie Harris. "I’ll try to stay as long as I can, but the way things are going right now, I may not be able to make it."
For rideshare drivers, they say their companies charge remain about the same, even as gas prices rose. Adding it all up, drivers are making less on each ride, and this is forcing them to work longer in order to break even.
"Put in more hours, you know. Working to make less money than we were making three or four months ago," said Fuad Besliga.
While both Lyft and Uber have announced they will add a surcharge to help their drivers offset the rising cost of gas.
Some drivers, however, say the surcharge will not help much.
"Only 45 cents? Come on. What is that going to do?" said one driver.
How are high fuel prices affecting truck drivers?
At truck stops, there are a lot of shrugged shoulders.
"I don't know what we're going to do," said truck driver Alan Thompson.
"With the prices and bills, it gets tough sometimes," said Adan Pena, an owner-operated truck driver.
According to AAA, diesel prices in Arizona rose by 74 cents in a week.
"74 cents in one week is pretty significant," said Tony Bradley with the Arizona Trucking Association.
"We say, ‘oh, the prices going higher, that’s fine, as long as they pay us more,’" said Pena. "Sometimes, we don’t get pay more. Prices stay the same price, so that’s when we get stressed out, and I mean, is it worth it?"
Contracts for gas prices are usually seven days behind. so when they rise quickly all at once. drivers have to eat the difference.
"An owner-operator who owns their own truck, they’re going to see that impact right away in their pocket book, and these aren’t 25 mile per gallon truck. These are six to nine miles per gallon, so that’s going to be a dramatic increase to that truck driver," said Bradley.
"Some of them are just waiting. They can’t afford it. We only make so much money to put fuel in our trucks and if it goes beyond that we’ll just stop," said Alan Thompson, who has been a truck driver for 40 years. "It’s not like it used to be. It’s just so expensive it takes the fun out of it. It's just a crying shame what this country is going though."
How are high gas prices affecting businesses?
Jim Ruebhausen with Stanley's Service Center said he is also affected by high gas prices.
"It happens every time gas spikes. Our business takes a hit, and it’s understandable," said Ruebhausen.
At Stanley's Service Center, many bays are empty on a normally busy Monday morning. He says higher gas prices lead to less work being needed on cars.
"You rethink how many trips you need to take somewhere. Do I need to go out of town for the weekend? Do I need to go to the store three times? Could I do it once? So the car gets used less and if it’s used less, there’s less maintenance," said Ruebhausen.
Charlie Edmond said high gas prices are impacting his limo service, and he will be forced to make some changes if prices continue to spike.
"It definitely effects the bottom line," said Edmond. "I'm being kind of particular on what trips I take. We haven’t really started adding fuel surcharges, but you know, it's something we might have to do down the road."
High gas prices are also impacting businesses in the pest control industry.
"It couldn't be worse, but we will get through it," said Mike Boyle with Burns Pest Elimination.
The company has a huge fleet of trucks that need their tanks filled, and the increase in gas prices comes as the company is in its busy season, with technicians hitting the road every day, some even driving hundreds of miles in one day to do pest control for others.
"We are going through 18,000 to 20,000 gallons a month in fuel. About $20,000 to $30,000 a month in fuel," said Boyle.
What about the average person?
The average commuter is also feeling the pain at the pump.
"I just put in five gallons of gas for $23," said Austin Peck. "I remember when I could almost fill this car for $23."
"They're really, really expensive, and they need to come back down," said Hailee Curtis of Phoenix.
"It’s bad, because I do a lot of driving back in Phoenix because my children and grandkids live in Phoenix, but we live in Prescott, so yeah it hurts. Cuts the trips down a little bit," said Mike Verville.
Driving aside, the average person could be affected by rising gas prices in other ways. Some companies, like Burns Pest Elimination, have charged customers a surcharge recently. For Burns Pest Elimination, it's an extra $2 to $4 per trip. Company officials say this is a temporary surcharge.
"It is not covering us at all," said Boyle. "We are trying to do the least bad thing we can do."
Boyles said customers have been understanding.
"It has been an excercise in human kindness," said Boyle. "We expected a huge backlash in negativity. Instead, we got the exact opposite."
Are people driving less in order to deal with higher gas prices?
In parts of the country with a rather robust public transit network, some commuters are taking public transportation.
Meanwhile, some commuters in the Phoenix area have also turned to public transportation.
"I’m not paying $5 a gallon. I do have a car, don't get me wrong," said Edna Melvin.
According to officials with Valley Metro, there is an increase in ridership on the light rail.
"Over the last six months, we have seen an increase in ridership," said Brittany Hoffman with Valley Metro.
These days, the light rail carries around 15,000 to 18,000 people on a typical weekend.
"Over the first weekend of March, we had two music festivals -- one in Phoenix, one in Tempe -- and both of them brought high ridership to the light rail system. We saw over 42,000 people that weekend," said Hoffman.
While trends show a correlation between a rise in gas prices and ridership, Hoffman says that is not the only reason why.
"We think it’s the vaccinations, events happening again, and the comfort of people being in public," said Hoffman.
Kevon Parker also noticed an increase in riders.
"A lot of people have been riding on the light rail," said Parker. "I'll admit it's cool, but sometimes, it gets a little crowded."
A day pass on the Phoenix light rail costs $4.
Buses use gas too. How is that helping the current situation?
According to a 2019 fact sheet issued by Valley Metro, 78% of buses in their fleet are powered by alternative fuels, or are hybrids.
In the fact sheet, Valley Metro officials claim their light rail, bus, and vanpool operations helped saved over 12 million gallons of gas, which, they say, is the equivalent of taking 23,611 cars off the road.
The Associated Press (AP) contributed to this report.
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