Gas prices are spiking again. Here's why.

Photo (c) Iryna Melnyk - Getty Images

Despite lower demand, the price at the pump is on a tear

For consumers weary of inflation, gasoline prices have been one area of the budget that has seen a little relief in 2023. That may be about to change.

Patrick DeHaan, head of Petroleum Analysis at GasBuddy, took to Twitter this week to report some sudden and significant moves in prices, with some states seeing larger increases than others.

DeHaan said 20 states have seen average gas prices rise by over 10 cents a gallon compared to a week ago. Here are some of the biggest moves:

  • Iowa +20 cents
  • Texas +18 cents
  • Georgia +16 cents
  • Indiana + 16 cents
  • Florida +16 cents
  • Tennessee +16 cents
  • North Carolina +15 cents
  • Kansas +14 cents
  • South Carolina +14 cents
  • Minnesota +14 cents

DeHaan says some stations in some of these states have seen prices rise 25 cents to 50 cents a gallon – and they’re still going up.

"On our current trajectory, it seems the national average could rise to $3.85/gal, and we could even get close to $4/gal on the first potential of a storm aiming for the Gulf," DeHaan tweeted.

Prices are still lower than a year ago

According to AAA, the national average price of regular gasoline is $3.73 a gallon, about 15 cents a gallon more than a week ago. But compared to a year ago, prices are relatively cheap. A year ago the national average was $4.28 a gallon.

Why are gasoline prices suddenly going up? One reason is the price of oil. A barrel of oil now costs between $70 and $80. The war in Ukraine continues to play a role in the oil market, with recent fighting damaging a major port facility.

The extreme heat, both in the U.S. and in Europe, may also be a factor. Because of sweltering temperatures, refineries have been forced to curtail operations, reducing output.

And then there’s OPEC, which has teamed with Russia to cut oil production in an effort to keep prices elevated.

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