by Ashira Kolupoti ‘24
Published Apr. 8th, 2022
Nationwide, the average for a regular gas fill-up has risen to $4.31 a gallon, the highest they’ve been. The previous record was in the the summer of 2008 during the stock market crash, when gas prices were $4.11 a gallon.
As gas prices continue to soar and are predicted to keep rising till 2023, many blame Joe Biden. In recent years, it has become an especially common occurrence to blame government officials, whether it be the president or Congress, when our finances are affected.
On his first day in office, Biden refused to approve a cross-border permit, which was a key component for the Keystone pipeline. Shortly after, the Canadian energy infrastructure company TC Energy stopped their plans of operating following the denial of this permit. Biden denied the permit’s approval after a decade-long worth of protests and legal battles. Signing to disapprove this permit was an essential part of his campaign, as the pipeline is a contributing aspect of climate change. However, it’s important to acknowledge that the Keystone pipeline stopped operating last June.
So why are gas prices rising now? First, it’s important to be aware of how gas prices are set. Gas prices are determined by taxes, distribution, marketing, and crude oil prices, with the latter being the largest factor in establishing gas prices. The United States is simultaneously the world’s largest producer and consumer of crude oil. Gas prices still rise even in the United States as crude oil is a global commodity.
Regardless of where the oil is mined from, the Organization of Petroleum Exporting Countries (OPEC), have an immense amount of authority in the price. Overall, gas prices are mostly determined by the crude oil prices, which fluctuate based on the supply and demand. The demand is the need for the oil and the supply is based on how much oil the OPEC chooses to mine and distribute.
However, the ongoing Russian invasion of Ukraine plays a huge role in the rising oil and gas prices. Many sanctions have been placed against Russia by several countries including the United States. Amongst these sanctions include a ban of Russian oil exports. Russia is one of the world’s largest crude oil producers, meaning current sanctions greatly decrease the oil supply for American gas companies. And as oil supply decreases and the demand stays the same, the price increases.