Households across the country are feeling the squeeze as gas prices continue to rise – reaching record highs in every state over the last few weeks. This comes on top of soaring costs elsewhere, as the price of groceries, housing, and medical care (to name just a few) are also on a steep upward trend.
Keep reading to find out why gas prices, specifically, are skyrocketing – and in terms of budgeting for higher costs at the pump, we’ll also share some tips to help your fuel money go further. With the national average price of gas now hitting $5 a gallon, it’s definitely worth making the most of these easy money-saving hacks to lower your weekly spending.
Reasons for the Rise
While, undoubtedly, the pandemic had a significant effect on gas prices, the primary reason that the cost is so high right now is due to geopolitical volatility. Sanctions against Russia, imposed as a result of the war against Ukraine, have pushed up the price of crude oil hugely: with Russia formerly supplying around 12% of the world’s crude oil, the ban on its import has had a profound effect on the price of fuel at the pump around the globe.
There’s another factor at play in the ballooning prices, too: the process of refining crude oil has become more expensive, and this increase is being partially passed on to the end consumer. Plus, the demand for refined oil is currently outstripping the country’s capacity to produce it. The drastic decrease in fuel consumption during the pandemic led many oil-producing companies to scale back production, and there’s still an element of catch-up going on in these companies trying to meet the current spike in demand.
And finally, there’s the increase in the cost of physically delivering the gas to local fueling stations: rises here, too, are also being factored into the end price at the pump and putting additional pressure on motorists. All of these elements have caused a perfect storm when it comes to shelling out for gas.
Ways to Save
With gas prices unlikely to come down any time soon, finding ways to save has become vital for many households.
Firstly, take advantage of any rewards programs offered by fueling stations that you regularly use. It only takes a few minutes to sign up to most programs, which typically give you points per gallon of fuel bought – these points can be collected and traded for discounts, which can quickly add up. Many grocery stores also run loyalty schemes that offer gas rewards and discounts to members.
Many people are now also using gas apps, which provide real-time information on gas stations nearby to you and their current price of fuel. Checking the app and choosing the station with the lowest prices every time is another quick and easy way to make little savings that can add up significantly over a month.
And finally, if you can, fill up on a Monday. A survey earlier in the year discovered that across most states in the country, gas is cheapest on this day, while it’s most expensive on Wednesdays, Thursdays, and Saturdays.
The Road Ahead
Joe Biden recently announced that his administration had facilitated the largest release of oil from global reserves in history; on top of this, the Federal Reserve has made several rate increases already this year in a bid to tame inflation and get gas prices down – so far, these actions have not had the desired results, although it is early days.
In terms of the future, there’s good and bad news. The bad news is that, with the situation in Russia so unpredictable, it’s likely that fuel prices will stay high – and possibly even continue to rise – for the rest of the year, though forecasters are hopeful that the situation could improve in 2023.
The good news? There’s a rumor that a pause in fuel tax could be brought into play by the Federal Government – but right now, it’s just that: a rumor. Motorists’ best bet is to use the tips above to try to manage the additional financial burden of the hike in gas costs and prepare for the long haul.
