Summary
- Gas prices have risen to the highest levels in eight months due to the heat suppressing oil refinery output, causing low supply and high demand.
- Prices are still 50 cents cheaper than last year, indicating a positive trajectory, and they are expected to start falling as the summer season ends and demand reduces.
- Higher gas prices are leading to people making the switch to electric vehicles, as people look to save money and avoid the rising fuel costs associated with internal combustion vehicles.
Gas prices have risen and fallen more than ever during the past few years. Recently, they have been on a downward path toward somewhat normal levels. However, the hot days of this year’s summer have other plans.
During the time of year when everyone needs affordable gasoline to drive away for their holiday, prices have risen to the highest they’ve been in the past eight months. In some states, a gallon of gas has surpassed the five-dollar mark. But what is driving this uphill hike again? Let’s take a closer look.
The Heat Is To Blame
A significant factor in this sudden rise in gas prices is the heat, states like Texas and Louisiana have been experiencing. The high temperatures are suppressing the output of oil refineries which have been designed to work efficiently up to 95 degrees. This means the country’s oil reserves are the lowest they have been in eight years. Of course, low supply means higher prices, but gas is also in high demand during this time of year.
Therefore, we are currently facing another low-supply and high-demand situation. This is the main factor in the sudden spike in gas prices. Aside from what’s happening inside the country, oil production has been scaled down in major oil-producing countries like Russia and Saudi Arabia. This also plays a role in the price increase.
The good news is that prices are still 50 cents cheaper than they were this time last year. This means that we are heading in a good trajectory even though we are currently experiencing a spike.
Prices Will Start Falling In The Near Future
As the summer holiday season is slowly coming to an end, demand for gas and diesel will once again reduce. This should cause prices to fall. Furthermore, with cooler months approaching, oil refineries are expected to begin working at full capacity again. Of course, external factors such as oil production from other countries will also play a role. As of now, the only way to ensure you get cheaper fuel is to shop around for the best prices.
As is typically the case, the most expensive fuel can be found in the West and specifically California where it has surpassed $5.00 per gallon. In the South-East things are looking much better with States such as Alabama sitting at the $3.30 mark, with the national average currently sitting at $3.841.
Higher Gas Prices Are Increasing EV Sales
People want to save money and high gas prices are a hindrance to your savings account. This means that more and more people are opting to switch to electric vehicles to avoid increasing fuel prices. Of course, charging an EV is generally considered cheaper than filling up an internal combustion vehicle. However, depending on where you are, charging up can still be expensive.
Don't forget that electricity prices are also drastically affected by world events and can change at any time. Of course, the inconvenience of finding a charger that isn't broken or occupied should also be taken into account. An EV isn’t a trouble-free solution yet but is one you could consider if your daily commute falls within the range capabilities of a conventional electric car.