Average gas prices in the U.S. creeped up Wednesday to a little over $3.50, higher than Tuesday, the week prior, the month prior and one year ago, according to AAA. Last March, average prices were at around $3.44.
Data from the U.S. Energy Information Administration showed that regular gasoline prices increased by $0.077 from the week of March 11 to the week of March 18 and $0.031 compared to a year ago.
This recent spike in prices marks the first time since late last year that prices are higher on a year-over year basis, CNN reported.
“It’s a trend that industry experts expect to continue in the coming weeks and months, especially if Russian oil facilities continue to get hit by drone attacks,” said the outlet.
Earlier this month, the U.S Bureau of Labor Statistics said that gasoline inflation was also up in February. Inflation for shelter and gasoline combined contributed over 60% of the monthly index increase for all items, said the bureau. When inflation continues to trend up, it becomes less likely that the Federal Reserve Bank will cut interest rates. On Wednesday, the Fed announced it would hold the rates steady rather than cut them.
Here’s where gas prices are the highest, according to AAA:
1. California, $4.936
2. Hawaii, $4.07
3. Washington, $4.352
4. Nevada, $4.236
5. Oregon, $4.119
6. Illinois, $3.876
7. Alaska, $3.864
8. Arizona, $3.727
9. Michigan, $3.626
10. Washington D.C., $3.632
Andy Lipow, president of Lipow Oil Associates said prices are likely to continue to trend upwards, per CNN. He said this is going to put increased pressure on the current administration and President Joe Biden, who is running for a second term in office. Polls have generally found Biden is nearly tied with his GOP challenger, former President Donald Trump.
So, why are gas prices getting higher?
“People have this visceral reaction to higher gas prices and they look to fix blame,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “But this is all about OPEC+ and drones, not the Biden administration.”
Specifically, he said that drone attacks on oil refineries in Russia are contributing to oil prices.
“It appears pretty clear that Ukrainians have discovered the best way to attack Vladimir Putin is to attack him in his wallet. That means knocking out refineries,” Kloza explained. “It’s a wildcard we’ve never had to deal with before.”
In early March, the Organization of the Petroleum Exporting Countries (OPPEC+) announced it would extend additional voluntary cuts of 2.2 million barrels per day. It said this move was “aimed at supporting the stability and balance of oil markets.”
“Russia’s voluntary production cut is in addition to the voluntary cut of 500 thousand barrels per day previously announced in April 2023, which extends until the end of December 2024,” said the organization. “The export cut will be made from the average export levels of the months of May and June of 2023.”
After the overall cuts were announced this month, CNN reported that “Russia and Iraq will cut 471,000 and 220,000 barrels, respectively, a downward adjustment from the 500,000 and 223,000 barrels each country initially announced.”
Fortunately, experts cited by CNN said Americans shouldn’t expect average national gas prices to exceed $4 per gallon this year.