Based on wholesale gasoline futures just before Biden’s announcement, average gas prices will probably hit $4.50 a gallon nationally in the next couple of days. And if crude oil prices keep rising, analysts say it’s not hard to see fuel costs reaching $5 a gallon on average — which means $6 to $7 in California and some parts of the Northeast.
What motorists pay at filling stations is determined mostly by crude prices on the world market. Those prices have jumped about 35% since Russia’s invasion of Ukraine on Feb. 24.
Markets have already priced in some of the higher costs, but there’s usually a lag of two to three weeks before refineries pass the increase they pay for crude along to consumers.
Pump prices were already soaring just on reports of the possible U.S. ban. On Tuesday the national average for regular gas topped $4.17 a gallon, breaking the previous record of $4.114 set in July 2008, according to the American Automobile Assn. One year ago, regular gas cost a little over $2.77. These figures aren’t adjusted for inflation. (At today’s prices, the cost in July 2008 would be about $5.30 a gallon.)
Patrick DeHaan, head of petroleum analysis at GasBuddy, said there could be months of high or rising prices ahead — possibly through the summer — “unless there is a drastic improvement in the Russia-Ukraine situation.”