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Gasoline prices top $5 a gallon nationally for the first time and are likely headed higher


Prices at Chevron stations in Menlo Park (California) on Tuesday May 24, 2022

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A gallon of unleaded gasoline cost more than $5 in the United States for the first-ever time. It was due to higher demand as a result of the recovery from the global pandemic, and diminished oil supply caused in part by the conflict in Ukraine.

Analysts predict that prices will continue to rise into the summer,

According to AAA,On Saturday, the national average price was $5.004. This is an increase of $3.07 from a year earlier and a record, which was not adjusted for inflation. The prices in around 20 states had already reached $5.50 or higher by the end of this week. West Coast prices were the most high.

Mark Zandi (chief economist, Moody’s Analytics) stated that the average household spends $160 less per month on gasoline than they did a year ago. That’s quite a lot.

Prices for gasoline usually peak around May, but they are on the rise this year. The average price of gas is now 65 cents more than it was a month ago. Analysts predict that the price of gasoline will not reach its peak until mid-July because there aren’t enough supplies. This is when the summer driving season typically peaks.

Patrick DeHaan of GasBuddy, the head of petroleum analysis, stated that “I don’t believe we’re far from” the highest prices. It won’t exceed $5.50, I don’t believe. Although $5.25 would be the highest, I believe the market is not able to keep up.

He said that gasoline prices may rise if any major refineries shut down or hurricane-related disruptions occur this summer.

The U.S. lost around 1,000,000 barrels per day in refining capacity and gasoline supply is lower than normal. The sanctions on Russian energy have also pushed oil prices up and caused tight fuel supplies globally.

Analysts say while consumers are feeling pain at the pump, the price of fueling a car with gasoline is not as big a part of a household’s spending as it had been in the past. It is due in part to better vehicles.

CNBC’s analysis found that drivers spent an average of 20 cents per mile for gasoline in June, despite steep increases. The same distance would have cost you 30 cents in dollars today, but it was only 20 cents back then.

Nicholas Wells from CNBC contributed to this article