Gasoline prices are pushing even further above $4 a gallon, the highest price American motorists have faced since July 2008, as calls grow to ban imports of Russian oil.
Prices at the pump were rising long before Russia invaded Ukraine and have skyrocketed faster since the start of the war. The U.S. national average for a gallon of gasoline climbed 45 cents a gallon last week and topped $4.06 on Monday, according to the AAA auto club.
The price of regular broke $4 a gallon on Sunday for the first time in nearly 14 years and is now up nearly 50% from a year ago.
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The price of petrol in Europe is even higher, averaging 1.75 euros per liter last week, according to the European Commission, or the equivalent of 7.21 dollars per gallon.
GasBuddy, which tracks prices down to the gas station level, said on Monday the United States was likely to beat its record price of $4.10 a gallon, but that does not take inflation into account. In current terms, the all-time high would be around $5.24 after accounting for inflation.
“Forget the $4 a gallon mark, the country will soon set new all-time highs and we could be approaching a national average of $4.50,” said GasBuddy analyst Patrick De Haan. “We have never been in this situation before, with this level of uncertainty. … Americans will feel the pain of rising prices for a while.
Oil prices rose early on Monday before retreating. By noon, benchmark U.S. crude rose 2% to around $118 a barrel, and the international price gained 4% to around $123 a barrel. Major US equity indices fell about 2%.
The United States is the largest oil producer in the world – ahead of Saudi Arabia and Russia – but it is also the largest consumer of oil, and it cannot meet this staggering demand with domestic crude alone.
The United States imported 245 million barrels of oil from Russia last year, about 8% of all U.S. oil imports, compared to 198 million barrels in 2020. That’s less than the US gets from Canada or Mexico, but more than it imported last year from Saudi Arabia. .
Russia’s increasingly violent attack on Ukraine has prompted calls to cut Russia off from the money it makes from oil and natural gas exports. Europe is heavily dependent on Russian gas.
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President Joe Biden has been reluctant to ban Russian oil, fearing it could further fuel inflation ahead of November’s midterm elections.
Many Republicans and a growing number of Democrats in the House and Senate, including House Speaker Nancy Pelosi, D-California, have endorsed the Russian crude ban as a way to put more pressure on Russian President Vladimir Putin . The White House has not ruled out a ban.
Talk of a ban on Russian oil has led US officials to consider other sources that are currently limited. In what was supposed to be a secret trip, top US officials visited Venezuela over the weekend to discuss the possibility of easing oil sanctions against the major crude exporting nation.