Skyrocketing gas prices will probably remain a fact of life through the summer of 2022.
Right now, the national average for a gallon of regular unleaded is $4.60, which is a 40 percent jump from the start of the year. In many parts of the United States, gasoline is well over $5 a gallon.
Oil companies are reporting record profits, and just about everyone is feeling grouchy at the pump.
The United States is one of the leading producers of oil and gas in the world, so how did we get here?
According to Kiplinger, all this got started when the COVID-19 pandemic roared to life in 2020. Demand for gas plummeted when almost everyone stayed home, and oil prices were very cheap through most of 2020. So, oil companies cut back on drilling new wells and pumping lots of oil out of existing wells.
Now, in 2022, most people believe the worst of COVID-19 is behind us, and demand for gasoline is very high. People — such as Linkage readers, who love driving and long road trips — are filling up their tanks regularly.
Oil producers have been slow to increase production, as they’ve got supply chain woes — and a shortage of workers. Also, why would an oil company want to flood more supply into a market that is giving them record revenues?
The Russian attack on Ukraine has also reduced oil and gas supplies around the world.
So, it looks like we’re going to pay more for gas this summer. A lot more.
This is painful, especially for lower-income Americans. We are all paying more, but they’re spending a higher percentage of their income on fuel.
Even as we gripe about gas prices, we’re still eager to drive.
AAA predicts that 39.2 million Americans will travel 50 or more miles over next week’s Memorial Day weekend. That’s 8.3 percent more than in 2021.
“Memorial Day is always a good predictor of what’s to come for summer travel,” said Paula Twidale, senior vice president, AAA Travel. “Based on our projections, summer travel isn’t just heating up, it will be on fire. People are overdue for a vacation and they are looking to catch up on some much-needed R&R in the coming months.”
Higher demand and lower supplies usually means higher prices, but Americans are willing to pay for the rewards of the open road.