Why Gas Is So Expensive, And There's No Easy Fix : Consider This from NPR This week, the average price for a gallon of gas in L.A. County crested six dollars — the highest in the country. The national average is up around 70 cents in the last month.

The are a lot of complicated reasons why gas is more expensive — and a lot of ideas for how to make this easier on consumers. But none of them are quick or easy.

NPR's Scott Horsley explains why drivers who are newly interested in purchasing an electric vehicle might not have a lot of options.

NPR's Brittany Cronin reports on calls for more domestic oil production in the U.S. — and why it may take some time for that to happen.

Here's more on why gas prices are so high from NPR's Chris Arnold.

In participating regions, you'll also hear a local news segment to help you make sense of what's going on in your community.

Email us at considerthis@npr.org.

High Gas Prices: Why There's No Quick Fix

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ARI SHAPIRO, HOST:

This month gas has been more expensive everywhere. And some of the highest prices...

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UNIDENTIFIED REPORTER #1: It's another day and another record.

UNIDENTIFIED REPORTER #2: Just when you think it can't go any higher than this...

UNIDENTIFIED REPORTER #3: Another alarming and budget-busting record with the highest gas prices in the country - Los Angeles.

SHAPIRO: Six dollars a gallon this week in LA County. And that's just the average.

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UNIDENTIFIED REPORTER #4: I mean, at this Chevron, we see 6.29 a gallon. It's hard to believe that we've jumped a dollar 25 on average in LA County for a gallon of regular gas.

SHAPIRO: And that jump is over the last month. Six bucks is well above the national average of around 4.24, but the national average is still up around 70 cents from a month ago. Here's James Bushnell, an energy economist at University of California Davis.

JAMES BUSHNELL: The rule of thumb is the average customer uses about 400 gallons per year. And so when the price goes up by a dollar a gallon, we're looking at another $400.

SHAPIRO: But the good news is cars are more fuel-efficient than they used to be, and the economy as a whole is less dependent on oil than in the past. Like, most people don't use it to heat their homes anymore. On the other hand...

BUSHNELL: Rising prices will disproportionately hit poor working-class and middle-class Americans.

SHAPIRO: Economist Joe Brusuelas told NPR this month while gas prices often go up and down, it's been generations since we've had high gas prices at the same time everything else is getting more expensive, too.

JOE BRUSUELAS: So Americans are going to experience a once-in-a-lifetime source of sticker shock through the remainder of the year. This is something that Americans just aren't accustomed to because we haven't seen it since the mid-1970s.

SHAPIRO: CONSIDER THIS - inflation and high gas prices are a one-two punch to many Americans' bank accounts. There are a lot of ideas for how to make oil cheaper or rely on it less, but none of those are quick and easy. From NPR, I'm Ari Shapiro. It's Thursday, March 24.

It's CONSIDER THIS FROM NPR. President Biden said earlier this month America will not subsidize Russia's invasion of Ukraine.

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PRESIDENT JOE BIDEN: We're banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin's war machine.

SHAPIRO: A ban on imports of Russian oil may have sounded like a big deal, but the U.S. doesn't get a ton of oil from Russia in the first place. And besides that, the fossil fuel industry had already enacted a kind of de facto ban on Russian oil.

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UNIDENTIFIED REPORTER #5: Major news from Shell Oil Company announcing that it will cease purchasing Russian oil and gas.

SHAPIRO: In the last month, big oil companies like Shell and BP announced they would stop doing business in Russia.

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UNIDENTIFIED REPORTER #6: The move ends 30 years of doing business in oil-rich Russia.

SHAPIRO: Banks also move to stop business with Russian oil buyers. And for companies in firms across the industry, shipping in the region got too dangerous.

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UNIDENTIFIED REPORTER #7: Parts of the Black Sea and the Sea of Azov are too dangerous for vessels to pass through, including freight ships.

SHAPIRO: Those things were happening before Biden's announcement.

DENTON CINQUEGRANA: The industry itself almost put a ban - basically put a ban on Russian crude oil.

SHAPIRO: Denton Cinquegrana is chief oil analyst of the Oil Price Information Service, which provides independent information to the oil industry.

CINQUEGRANA: It was almost a de facto ban before. The president's announcement just makes it official.

SHAPIRO: All that adds up to less Russian oil on the global market. And even though the U.S. doesn't get a ton of oil from Russia, Russia provides about 10% of the global supply. Less of that oil in the global market is just one reason prices are up. Another big one is a fundamental mismatch between the global demand for oil and the supply. Demand recovered rapidly from early in the pandemic. Supply has returned more slowly. So why can't oil companies just ramp up supply, drill more oil here in the United States, for example? Well, it's not that simple. Here's NPR's Brittany Cronin.

BRITTANY CRONIN, BYLINE: Let's start at the White House. President Biden says despite his long-term climate ambitions, he's not standing in the way of U.S. oil producers.

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BIDEN: The oil and gas industry has millions of acres leased. They have 9,000 permits to drill now. They could be drilling right now, yesterday, last week, last year.

CRONIN: Biden has a complicated history with oil companies. He campaigned on transitioning away from oil. But to get gas prices down, he wants oil companies to ramp up production fast. Vicki Hollub, president and CEO of Occidental Petroleum, says that's easier said than done. At the CERAweek Energy Conference last week, she was asked about how quickly oil producers can boost output, and the outlook was not good.

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VICKI HOLLUB: I would say that we're in a really dire situation here.

CRONIN: Coming into this year, Hollub says oil producers weren't really planning on significant growth. The industry was recovering from a huge drop in demand early in the pandemic. It's still about a million and a half barrels per day short of pre-pandemic production. And now these companies are being asked to pump even more.

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HOLLUB: Nobody really prepared in advance for significant growth. And so now with the supply chain challenges, it makes any kind of attempt to grow at a rapid pace very, very difficult.

CRONIN: But start with the fact that more oil requires drilling more wells. Farzin Mou, vice president of intelligence at Enverus, an energy analytics company, says it's not as simple as turning a spigot.

FARZIN MOU: The point from which you drill a rig to the point that you can turn it online - it takes about 6 to 8 months typically.

CRONIN: And these days are anything but typical. Mou says she doesn't expect to see more oil until next year. That's for a few reasons, starting with the supply chain. So first, there's materials. To drill an oil well, you need things like sand and steel, things that are expensive and in short supply right now. Then you have labor. The number of workers producing oil and gas had been declining for years. Then at the beginning of the pandemic, a lot of workers got laid off.

STACEY MORRIS: And those people may not come back, right?

CRONIN: That's Stacey Morris, director of research at Alerian, an energy data provider.

MORRIS: They've probably had to go on and find something else to do because their job in the oil industry went away.

CRONIN: Last year, some of those jobs did come back, but not all of them. But the biggest factor for oil companies right now might actually be fear. Their investors have been telling them to focus on returns over growth. Don't go chasing the next oil boom.

MORRIS: I think energy companies were very afraid to ramp production because they were going to get punished by investors.

CRONIN: Now, maybe Russia's invasion into Ukraine will change that equation. But top oil executives are proceeding with caution. Oil prices are volatile. And they're all too familiar with the bust at the other side of the boom. Here's Vicki Hollub, Occidental Petroleum president and CEO.

HOLLUB: I think there has to be growth in supply at some point when we can make it happen.

CRONIN: No promises when that will be. So if you're hoping that U.S. producers might relieve some of that pressure at the pump, you might be waiting for a while.

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SHAPIRO: NPR's Brittany Cronin. If there's no big change in oil supply on the way soon, how about using less of it? Many drivers are looking for vehicles that will go farther on a gallon of gas or that don't use gasoline at all. That's a shift from a year ago, when gas-hungry pickup trucks and SUVs accounted for more than three-quarters of all vehicles sold. But shoppers looking for more fuel efficiency might not find much to choose from, as NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Laurie Silvia (ph) needs a new car. Her 2008 Ford Explorer is showing its age, and filling its 22-gallon gas tank is a drain on her wallet. Silvia likes the feel of the Explorer, though. It holds the tools and plants she needs as a landscaper. And when she's finished with work, she can take her stand-up paddle board to the nearby beach in Rhode Island.

LAURIE SILVIA: I just like the feeling of something big and heavy, and it helps me feel safer to be up really high and surrounded by a good amount of metal. I come from a family of small women, and they've all driven enormous cars.

HORSLEY: Silvia would like to buy a hybrid SUV that gets better gas mileage, but not at today's prices.

SILVIA: Right now, I don't feel like I can afford one, even though I would like to.

HORSLEY: Zoe Wise (ph) has also been frustrated in her search for a car in Alaska. Right now, Wise and her husband are sharing a 16-year-old Toyota Matrix.

ZOE WISE: He will drive me to work in the morning, drop me off. And then I'll drop him off at work after I get off work, which is kind of ridiculous, too, because with the cost of gas right now, we're going through a lot more gas because we're spending time driving each other to and from work.

HORSLEY: With gasoline in Anchorage this week selling for 4.69 a gallon, Wise says she's giving more weight to her husband's desire for an electric car.

WISE: I always thought, like, that's a little bit of a luxury. I don't know if that's something that we actually need to get. But now we're looking at it a little bit more seriously.

HORSLEY: A lot of car buyers are looking more seriously at fuel efficiency since Russia's invasion of Ukraine pushed gas prices to a record high this month. Pat Ryan runs the car buying app CoPilot, which allows him to track what car shoppers are looking for and what dealers are offering.

PAT RYAN: I'd say we're seeing both sides of the dance between consumer and dealer.

HORSLEY: Right now that dance is a little out of step. There's suddenly a lot more demand for electric cars, hybrids and small gasoline-powered vehicles, but there aren't many available. Ryan says the price of a used Tesla has jumped $2,000 in a single week to $63,000. Used SUVs, on the other hand, have been marked down over $800 in the last month.

RYAN: They're the famous hundred-dollar-to-fill-up kind of vehicles, right? I think dealers are feeling the pressure on those. They're worried about having these big gas-guzzlers on the lot.

HORSLEY: Ryan says, so far, there hasn't been a similar discount on pickup trucks, which are still in high demand. Pete Swenson, who's senior vice president for a Minnesota chain of car dealerships, notes both pickups and SUVs get better gas mileage than they used to. But he says dealers are on the lookout for any big shift in what buyers want.

PETE SWENSON: You know, in previous times when gas spiked, people reacted quickly. I mean, I've never seen so many people trade out of their trucks and big SUVs for cars. And then when gas went back down, it seems like they switched back.

HORSLEY: Electric cars were all the buzz at the National Automobile Dealers show in Las Vegas earlier this month, but supplies are limited. Prices are relatively high, and Swenson says a lot of would-be customers are still in wait-and-see mode. Marline Dempster (ph) was looking to replace her old car last month when her neighbor got a new Tesla. She took one drive in her neighbor's car and ordered her own Tesla that same day.

MARLINE DEMPSTER: Oh, (laughter) it's amazing what those cars can do. The torque is amazing. And I just feel really good about not using petroleum.

HORSLEY: Dempster placed her order just before this month, when gas prices in California soared to nearly $6 a gallon. She feels lucky she bought when she did.

DEMPSTER: Since I ordered my Tesla, the down payments doubled, and the price has gone up several thousand dollars.

HORSLEY: Dempster expects delivery of her new electric car in about two months.

SHAPIRO: NPR's Scott Horsley. You also heard reporting in this episode from our colleagues at NPR's Business Desk, Chris Arnold and Camila Domonoske.

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SHAPIRO: It's CONSIDER THIS FROM NPR. I'm Ari Shapiro.

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