The national average retail price for regular gasoline hit $5 per gallon on Saturday for the first time in over two decades, according to data from AAA.
It’s the highest the group has seen gas prices rise since it started tracking the data in 2000, and it’s likely to get worse as oil demand continues to outpace global oil supply, driving barrel prices even higher, AAA spokesperson Devin Gladden said.
As of Saturday, prices at the pump are63 cents higher than they were a month ago and nearly $2 morethan a year ago, according to AAA data.
Gladden noted that oil prices reached $120 per barrel this week, which was also seen Russia first invaded Ukraine. What shortly followed was a continuous streak of record-high gas prices. The price of oil accounts for 50% of what consumers pay for at the pump.
A customer pumps gas into their car at a gas station on May 18, 2022 in Petaluma, California. ((Photo by Justin Sullivan/Getty Images) / Getty Images)
There are multiple factors that are causing more pain at the pump for drivers: Sanctions placed on Russia for its invasion of Ukraine; higher fuel demand as drivers are “reclaiming their travel time” after being restricted over the past two years; and the official start of hurricane season, which could further threaten supply.
“Even just the threat of a hurricane, that can shut down crude production, particularly in the Gulf Coast, and that can also cause oil prices to rise,” Gladden said.
If the price of oil hits $140 to $150 per barrel “we are going to see significantly increased gas prices."
However, Gladden doesn’t see consumers pumping the brakes despite the fact that some became wary when prices hit $4 per gallon.
Rather, "we are seeing people make different economic decisions,” he said. “So it might not necessarily be reflected in gas use, but it might be that they’re eating out less, and they’re spending fewer dollars on discretionary spending.”
The higher prices go, the “more creative drivers are going to be how they save money” in other areas of their lives, Gladden said.