Why Gas Prices Have Increased In The Last 3 Months
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If you've filled up your car recently, no doubt you noticed that gas prices have been rising by quite a bit. NPR's Camila Domonoske reports.
CAMILA DOMONOSKE, BYLINE: The national average gas price has risen by more than 50 cents in the last three months. Even if you haven't been busting out your commuter vehicle, the change was hard to miss on social media or the local news.
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UNIDENTIFIED PERSON #1: At this point, you know, people may be considering purchasing a bike because gas prices across Georgia are just skyrocket-high.
UNIDENTIFIED PERSON #2: It just seems like every time I go to fill up, I'm paying a little more.
DOMONOSKE: Right now the national average price for a gallon of gasoline is around $2.87. That's not a record high. It's not even the highest in the last few years. But it's a lot higher than just a few months ago, so what's happening?
Patrick De Haan is the head of petroleum analysis at GasBuddy.
PATRICK DE HAAN: Really, the blame of this is economic improvement - Americans getting out, having places to go. The economy's reopening, and Americans are responding vigorously, driving up demand.
DOMONOSKE: Gas prices are governed by supply and demand. Demand has been coming back after the lows of the pandemic. And supply - it's still pretty low. You need crude oil, of course, to make gasoline. The OPEC oil cartel is keeping a lid on output, and U.S. oil companies have voluntarily kept their production low because when oil is more scarce, it's more profitable. You might be wondering whether the change has anything to do with President Biden taking office. After all, his administration wants to tackle climate change and reduce the country's use of oil. But De Haan says White House policies are not affecting gasoline prices today.
DE HAAN: This is really a limitation in the future. Once the U.S. does return to normal and oil companies are looking to drill, this could become a headache.
DOMONOSKE: That return to normal is still far away. For now, it's Econ 101, not the White House, that's shaping prices. Gas prices seem to have stabilized after these months of climbing. De Haan predicts they'll even dip down for a little while thanks to a recent dip in global crude prices. But then we hit road-trip season.
DE HAAN: It's not impossible that we could see prices again rising this summer.
DOMONOSKE: It's all based, De Haan says, on what happens with supply and demand.
Camila Domonoske, NPR News.
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