Rising oil prices are driving the cost at the pump higher
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Gasoline prices at the pump in the US hit a new all-time record on Tuesday, according to the American Automobile Association (AAA).
The average retail cost of a gallon of gas hit $4.374 early on Tuesday, the AAA said, surpassing the former record of $4.331, set in March.
The increase is mainly due to the high cost of crude oil, which was hovering near $100 per barrel last week and is now closing in on $110, the association explains on its website.
Futures of Brent crude, the main global benchmark, have actually dropped 7% since March 30. As a result, gas prices ticked slightly lower in April but are now up roughly 10%.
The retail price of diesel fuel also reached a record this week, hitting $5.45 per gallon.
A recent survey found that increasingly expensive fuel has forced roughly two-thirds of vehicle owners in the US to change their driving habits.
READ MORE:
Americans change habits as fuel costs bite – poll
Oil prices have been pushed higher by some US refineries having closed during the pandemic, while the remaining ones are nearing full capacity, according to data from the Energy Information Administration.
Global fuel stockpiles are being reduced as demand has recovered to pre-pandemic levels, whereas production has not yet been able to catch up. Oil supplies tightened further after Russia – a major oil exporter – launched its offensive in Ukraine, leading to the United States, the EU and their allies imposing sanctions on Russia and banning, or planning to phase out, the country’s oil.
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