Gas Prices Shoot Up at Fastest Rate on Record

Inflation-adjusted gas prices aren’t at record highs. But if March prices average $4.22 a gallon, as they have so far, they still show that motorists will have been saddled with the biggest month-over-month price increase since EIA records began in the mid-’70s. The next-highest increase was after Hurricane Katrina in 2005.

Some regions have seen greater price increases than others. Nevada saw the biggest increase, with prices up $1.15 for a gallon over the past month, according to AAA, much higher than the national average of 72 cents. The smallest change was in Maryland, where prices rose 28 cents.

How much more a gallon of regular gas costs now than a month ago

Biggest

hikes

Nevada

Up $1.15

California

Up $1.11

Utah

Up $0.93

Arizona

Up $0.90

Biggest

hikes

Nevada

Up $1.15

California

Up $1.11

Utah

Up $0.93

Arizona

Up $0.90

Biggest

hikes

Nevada

Up $1.15

California

Up $1.11

Utah

Up $0.93

Arizona

Up $0.90

A number of factors can contribute to these regional differences, including gasoline specifications, which switch to summer-grade earlier in some parts of the country, like California. “Summer grade gasoline is more expensive to produce and may have contributed to a larger price response recently,” according to the EIA.

Supply-and-demand dynamics also play a part. Gasoline inventories are below their five-year historic range in the West Coast region and above average for this time of year in the Midwest, according to the EIA.

“The more the demand, the less the supply, the higher the cost,” said Andrew Gross, a spokesperson for AAA.

Some of the main ingredients that make up the retail price for regular gas include costs and profits of refining, distribution and marketing. Taxes are another main component, and some lawmakers have proposed or enacted a halt on gas taxes amid high inflation.

The cost of crude oil accounts for the lion’s share of what drivers pay at the pump, though.

This means gasoline prices generally follow crude-oil prices, which have been increasing as U.S. demand returns to pre-pandemic levels faster than production. More recently, Russia’s Feb. 24 invasion into Ukraine has caused crude-oil prices to sharply increase over the prospect of tighter global supplies as sanctions mount on the world’s second-largest exporter of crude oil.

The daily spot price for the U.S. benchmark crude oil topped $100 a barrel for the first time in nearly eight years on March 1. When oil prices rose above $125 in 2008, gas prices barely broke $4.

Weekly prices since 2000

Weeks in 2022

Each dot is a week

Second week

of March

Second week of Februrary

(before the invasion)

The higher the

price of oil, the higher

the price of gas

Gallon of

Regular gas

The lower the

price of oil, the lower

the price of gas

Barrel of

Crude oil

Weeks in 2022

Each dot is a week

Second week

of March

Second week of Februrary

(before the invasion)

The higher the

price of oil, the higher

the price of gas

Gallon of

Regular gas

The lower the

price of oil, the lower

the price of gas

Barrel of

Crude oil

Weeks in 2022

Each dot is a week

Second week

of March

Second week of Februrary

(before the invasion)

The higher the

price of oil, the higher

the price of gas

Gallon of

Regular gas

The lower the

price of oil, the lower

the price of gas

Barrel of

Crude oil

Weeks in 2022

Each dot is a week

Second week

of March

Second week

of Februrary

(before the invasion)

Gallon of

Regular gas

The higher the

price of oil, the higher

the price of gas

The lower the

price of oil, the lower

the price of gas

Barrel of

Crude oil

Weeks in 2022

Each dot is a week

Second week

of March

Second week

of Februrary

(before the invasion)

Gallon of

Regular gas

The higher the

price of oil, the higher

the price of gas

The lower the

price of oil, the lower

the price of gas

Barrel of

Crude oil

These elevated gas prices sting a little less than they did in the early ’80s, when inflation-adjusted prices were similar, because vehicles have become more fuel efficient. In 1980, new passenger vehicles got an average estimated 19 miles to the gallon, according to the Environmental Protection Agency. New vehicles today get about 25 miles to the gallon.

So, while gas prices in 1980 and in March of this year are similar after adjusting for inflation, drivers need 25% less gas to travel the same distance today as was needed then.

If oil prices remain at their current levels, any summer road trips might cost more than they have in years.

“I think as long as oil is hovering around $100/bbl, gas prices will remain elevated at the pump,” said Mr. Gross.