Gasoline prices are spiking across the country as warmer weather triggers an annual uptick in travel. Other factors, including the recent shutdown of the Colonial Pipeline following a cyber-attack and the artificially low prices during the pandemic-era, have also contributed to the climb. It’s all about supply and demand.
According to recent data from the American Automobile Association (AAA), gasoline prices are up seven percent from a month ago and 62 percent compared to this time last year. Price levels are highest on the West Coast while the South Central region of the U.S. record the lowest. View a snapshot from Monday of this week below:
Source: American Automobile Association (AAA)
In addition to typical market mechanisms, political shifts in energy policy threaten to inflate prices further. The Biden administration’s aversion to traditional, more reliable sources of energy could induce lower supply and therefore higher costs. Actions to significantly curtail reliable forms of energy will not only impact individuals at the pump, but will balloon operational costs for nearly every business—big or small.
Gas prices always fluctuate and, historically, spike during the summer months. Let’s just hope they don’t jump too high and suppress economic growth.