Gas prices swing up another 6 cents per gallon amid rising demand, refinery limits

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Analysts say the limited capacity at refineries is the result of bad weather, COVID-19 and Russia’s war in Ukraine.

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Gas prices swing up another 6 cents per gallon amid rising demand, refinery limits

According to AAA, California has the nation’s most expensive gas — at a staggering $6.37 — followed by Nevada ($5.52), Hawaii ($5.48) and Oregon and Washington ($5.46). File Photo by Terry Schmitt/UPI | License Photo

Gas prices in the United States have swung upward again, due mainly to rising summer demand and limited capacity at refineries worldwide.

The average price for a gallon of gasoline surged early Tuesday to about $4.92 — about 6 cents higher than Monday’s average, according to AAA.

For weeks, each increase has set a new all-time high for the cost of gas in the United States.

On Monday, the national average was $4.86 per gallon. A week ago, that mark was $4.62 and a month ago it was $4.30 — meaning the average has soared by 62 cents over the past four weeks. A year ago, the average was $3.05 per gallon.

According to AAA, California has the nation’s most expensive gas — at a staggering $6.37 — followed by Nevada ($5.52), Hawaii ($5.48) and Oregon and Washington ($5.46).

As of Tuesday, 10 states had averages above $5 per gallon.

Georgia has the nation’s least-expensive gas, at $4.33, followed by Arkansas ($4.45), Mississippi ($4.46) and Louisiana ($4.48).

With a traditional rise in demand over the summer months, many analysts believe that the national average will eclipse $5 per gallon.

“After a blistering week of gas prices jumping in nearly every town, city, state and area possible, more bad news is on the horizon,” Patrick De Haan, GasBuddy’s head of petroleum analysis, said in a statement Monday. “It now appears not if, but when, we’ll hit that psychologically critical $5 national average.

“[It] doesn’t look to improve drastically anytime soon.”

Gas prices swing up another 6 cents per gallon amid rising demand, refinery limits

A refinery is seen in Carson, Calif., on April 21, 2021. Limited capacity at refineries worldwide — resulting from bad weather, COVID-19 and the Russian war in Ukraine — is having a direct effect on gas prices in the U.S. File Photo by Jim Ruymen/UPI

Demand is only part of the reason for the rising prices. Limited capacity at U.S. and foreign refineries is also having a significant influence on prices at the pump.

The limited capacity is a result of several factors, experts say. They note that some refineries were closed during the worst of the COVID-19 pandemic, while others closed or restricted production due to severe weather events and market conditions related to cleaner fuels. Russia’s war in Ukraine forced more refineries overseas to shut down. All of those factors influence the cost of gas in the United States.

“It takes many months of planning and work and money to restart one and companies have to be sure there’s long-term demand,” John Mayes, vice president for the energy consulting firm Turner, Mason & Co., told USA Today.

Andy Lipow, president of Lipow Oil Associates, said the start of the 2022 hurricane season means that any major storm in the Gulf of Mexico could further affect refineries and lead to higher prices.

“A major storm making landfall along the Gulf Coast, where 15% of the nation’s oil production and over 45% of the nation’s refinery capacity is located, can result in a significant supply disruption sending prices even higher,” Lipow told Fox Business.

Economists at Bank of America say that higher gas prices disproportionately affect poorer households the most.

The analysts say that data show that average gas spending per household increased to almost 8% for the week ending May 28. For homes with an income lower than $50,000, that average is close to 10%.

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