The price for U.S. gasoline hit a record high, tracking a surge in global energy markets and showing how the war in Ukraine is having far-reaching economic consequences.
The spiraling cost of filling up a tank adds fresh pressure on American households already dealing with the quickest inflation in decades, and could crimp economic growth by curbing spending on other items.
The national average price for regular gasoline hit $4.173 a gallon, surpassing the previous record of $4.114 reached in July 2008, AAA said early Tuesday. The price was 15% higher than a week earlier and 21% higher than a month earlier, the automobile association’s figures showed.
Energy markets were already tight as the global economy rebounded from the pandemic, and gasoline prices have climbed recently as traders, shippers and financiers have shunned supplies of oil from Russia, which is the world’s second-largest exporter of crude oil after Saudi Arabia, according to the International Energy Agency.
Benchmark U.S. crude-oil futures have jumped 59% so far this year through Monday, when they settled at $119.40 a barrel, the highest level since September 2008. In Asian trading hours Tuesday, the price rose a further 1.5% to $121.14 a barrel.
U.S. fuel makers also pulled back on refining oil into gasoline, diesel and other products during the pandemic-driven economic slowdown. The U.S. market has lost about one million barrels of daily gasoline-refining capacity since early 2020, when it was producing about 19 million barrels of gasoline a day.
Gasoline prices vary significantly based on taxes and access to energy infrastructure, with average prices in some states such as California and Nevada much higher than those in others such as Texas and Oklahoma, AAA data shows.
The comparison with 2008 isn’t adjusted for changes in purchasing power. Adjusting for inflation since then, the earlier record would equate to a price now of about $5.20 a gallon, according to one estimate.