The cost of gasoline has been rising noticeably over the last several months. The burning question still stands: what is causing gas prices to rise, and how can this be resolved globally? The average gas price in the United States as of mid-April is $3.679 a gallon (April 19, 2024).
The global spike in gas prices was mostly caused by Iran’s war on Israel. But after Iran played down the Israeli drone attack inside its borders, prices fell. Nevertheless, since the start of the crisis between Russia and Ukraine, oil prices have increased. Consequently, the Middle East conflict between Israel and Palestine has had an impact on oil prices.
What is causing the increase in gas prices in the USA?
The price of oil has increased in the USA by 4 cents from the previous week and by 19 cents from the previous month. The average cost of gas was $3.489 per gallon last month. On a nationwide average, petrol prices have gone up by 59 cents in 2024, although the price of a gallon has remained same since the end of 2023.
Despite a notable increase in prices, the rate of inflation is less than it was in the preceding two years (2022, 2023). The most expensive prices ever reported were $5.016 in 2022.
What are the peak gas prices in the United States?
Gas prices are at an all-time high in California, at $5.450 per gallon. Californian drivers will pay the highest average rates in 2024.
The following states in the US have the highest rates:
- California: $5.450
- Hawaii: $4.781
- Washington: $4.672
- Nevada: $4.632
- Oregon: $4.441
States with the lowest gas prices
Mississippi has the lowest gas prices in the union, with a gallon of oil costing $3.111. The following are the US gas prices that are the lowest:
- Mississippi: $3.111
- Louisiana: $3.179
- Colorado: $3.183
- Oklahoma: $3.211
- Arkansas: $3.242
Consumer Price Index (CPI) and the Increase in Gasoline Prices in March 2024
March 2024 saw a spike in the US economy that was linked to rising gas costs, which led citizens to wonder why the prices were rising. The immediate effects of gas prices on food prices, necessities, and rental expenses were highlighted in a report on the most recent Consumer Price Index (CPI) released by the Bureau of Labor Statistics on April 10.
The gasoline CPI index tracks:
Gas prices across all categories rose by 1.7% between February and March.
In 2023, gas prices increased by approximately 1.3%.
Since energy prices are erratic, they are excluded from the inflation cpi index. They are not taken into account by policymakers or economists when determining the rates. Nonetheless, a boost in oil shows to have a significant effect on a nation’s economy.
What effect does Israel’s conflict with Gaza have on gas prices?
Although neither Israel nor Gaza produce any oil, their connections to oil-producing countries have an impact on fuel prices. Furthermore, other groups’ acts elsewhere, such attacks on commercial ships in the Red Sea, have been sparked by the tension between these two countries.
These attacks on commercial vessels, carried out by the Houthis from Yemen, caused disruptions to regular trade routes. These Yemeni attacks force traders to travel longer distances in order to get at their destinations without incident. As a result, the cost of shipping businesses’ maritime cargo transportation increases.
Furthermore, a number of oil-producing countries, such as Iran, support Palestine. As a result, changes in Middle East tensions are reflected in changes in oil prices. Although it may not be widely known, Iran is a major member of the Organization of the Petroleum Exporting Countries (OPEC) and the third-largest oil producer in the world.
Approximately 40% of the world’s crude oil supply comes from Iran, either directly or through production.
Conclusion
In summary, the reasons behind the rise in gas prices include the global economic downturn, conflicts in various regions, and the depletion of oil reserves. Consequently, gas prices continue to fluctuate, often influenced by the level of tension in oil-producing nations. This has become a means of exerting influence in international politics on a large scale.
Looking ahead, gas and oil prices may continue to fluctuate rather than stabilize, depending on global conditions. What are your thoughts on the ongoing increase in gas prices? Feel free to share your comments below.
