Gas prices are soaring with no end in sight
Another day, another record high gas price nationwide, with both Florida and Pensacola not far behind.
“The national average [on Wednesday] is $5.01, and the Florida state average is not far behind,” said Mark Jenkins at AAA South in Tampa.
Translation: it costs an extra $28 to fill up a 15-gallon tank, bringing the total to $72. Jenkins says that adds up for both workaday driving and recreational.
“[In] some cases people are having to economize and make some difficult decisions,” said Jenkins. “In most cases, we’re seeing that most people are just choosing to drive less often. When it comes to travel, they’re traveling more regionally, traveling a little bit closer to home, taking fewer trips, shorter days, and shorter distances as well.”
As for what’s causing prices to climb, the first finger to be pointed needs to be at what could be called “Economics 101” — global supply and demand. During the COVID-19 pandemic, oil companies reduced production and closed some refineries because people didn’t travel as much, it was an effort to stop bleeding money. And now, there’s more demand and competition.
“A lot of countries are looking at anyplace to find it," Jenkins said. "Especially countries that are in the European Union who are now boycotting Russian fuel. Of course, Russia was one of their main suppliers, so now the EU countries are having to find supply elsewhere and are now in a market that is extremely competitive. And all that competition leads to higher prices.”
“Jobs are back, but prices are still too high. COVID is down, but gas prices are up. Our work isn’t done," said President Joe Biden,speaking Tuesday at the AFL-CIO convention in Philadelphia.
As the pandemic began to loosen up, along came Vladimir Putin’s invasion of Ukraine.
“My plan is simple; first, I’m doing everything in my power to block Putin’s gas price hike; just since he invaded Ukraine, [gas has] gone up $1.74 a gallon,” said the president. “Because of nothing else but that.”
That plan to reduce the cost of fuel and food, according to the president, includes pressure on big oil to boost production, along with the largest-ever release of oil from the global stockpile.
“A million barrels a day, and 240 million barrels to boost global supply,” he said. “I’ve convinced other nations to join us, and I’m working closely with our European partners to get 20 million tons of grain locked in Ukraine onto the market to help bring down food prices.”
Many place the blame on Biden for the pain at the pump. But AAA’s Mark Jenkins says a United States president has little, if anything, to do with fuel prices.
“The president is not able to force oil companies to produce more or less oil, (he) does not set the price at the pump, [and] the president does not set the price of oil," said Jenkins. "And oil companies don’t do that either. Oil prices are bought, sold, and traded on the global futures market. And if there’s another country that’s willing to pay more for that oil, then usually that deal goes to the top bidder.”
Memorial Day kicked off the summer driving season, with July 4 looming and Labor Day nearing the horizon. Currently, fuel prices are both higher and more volatile, especially since Russia’s invasion of Ukraine.
“It’s very challenging to really create any kind of realistic expectations of what prices will be next month, let alone two weeks from now,” Jenkins said. “But based on the way things have been trending, it sure seems like gas prices are likely to get more expensive. It’s easier to make a case for gas prices to continue rising than it is for them to fall at this point.”
But it’s not just vacations. Jenkins says as fuel prices rise, so does practically everything else.
“When the cost of a barrel of oil is extraordinarily high, then that raises the cost for jet fuel, diesel [and] gasoline; so that raises the price to move different items,” he said. “Whether it’s groceries at the grocery store or the cost to deliver something to your doorstep.”
And if you think gas is high, check out diesel — averaging $5.78 per gallon statewide and $5.63 in Pensacola.