Fuel prices across the United States continue to soar as experts warn that prices have not yet peaked.
According to data from the American Automobile Association (AAA) taken at press time, the average price of a gallon of regular-grade gasoline across the nation is currently $3.514, an increase of more than 30 percent since the same time last year, when it was just $2.519 a gallon.
The average price of diesel is $3.921, up from $2.775 a year ago.
As prices rise, demand for gasoline continues to rise as well with demand increasing from 8.23 million barrels of fuel per day to 9.13 million barrels per day, indicating a disparity between demand and supply.
The prices at the pump are being blamed on the rising cost of crude oil. Currently WTI crude is trading at $94.54 and Brent Crude at $95.63 a barrel, up 2.47 and 2.35 percent respectively in the past 24-hours.
Analysts believe that oil will hit over $100 per barrel this year driven in part by declining OPEC+ spare capacity.
The COVID-19 pandemic continues to wreak havoc on markets as well causing a lag in supply which is also pushing prices up to levels not seen since 2014. Should any other supply disruptions emerge, oil prices could skyrocket.
However, Robert McNally, the founder and president of Rapidan Energy, told Anadolu Agency that crude prices are also expected to correct down to the $70-$80 level “as market fundamentals soften up a bit.”
McNally also said that oil prices could reach as high as $150 a barrel in the coming years as “a new multi-year boom cycle gets underway,” indicating Americans need to brace for even more price hikes at the pump.
The soaring fuel costs are having an effect on the cost of everyday goods as the cost to ship them increases in tandem with the price of fuel.
Current inflation trends, once widely characterized as transitory, continue to march upwards presenting a complex problem for the U.S. Federal reserve.
Former White House chief of staff Mick Mulvaney told Fox News that the Fed raising interest rates “won’t be enough” to address inflation.
According to the consumer price index, inflation soared last month by 6.8 percent from a year earlier, the biggest 12-month jump since 1982.
The worsening inflation has prompted Wells Fargo economists to grimly joke that the Labor Department CPI (Consumer Price Index) should stand for “Consumer Pain Index.”
Over the past year bacon prices are up 21 percent, eggs up 8 percent and gasoline prices are up a whopping 58 percent.
Jason Furman, an economic adviser in the Obama White House now serving at the Harvard Kennedy School, told NBC New York, that “a sizeable chunk of the inflation we’re seeing is the inevitable result of coming out of the pandemic,”/ asserting that policymakers were so intent on staving off economic collapse brought on by the pandemic that they “systematically underestimate inflation.”
“They poured kerosene on the fire,” he said.