By Laura Sanicola

(Reuters) – The United States consumes more gasoline than any other country in the world. Americans are becoming increasingly concerned at rising fuel costs.

Tuesday’s announcement by the White House outlined plans to reduce oil prices.

Last year, gasoline prices averaged $3.40 per gallon. That’s an increase from $2.11 last year. Consumers are concerned by the sudden 61% increase in gasoline prices over twelve months.

The American Automobile Association predicts that 48.3million people will be on the roads this Thanksgiving. This is almost 4 million more than in 2018, but less than 2019 levels.

HAVE GASOLINE PRICES EVER BEEN SO HIGH?

Yes. In July 2008, a gallon regular gasoline cost $4.11 Although the current price is much lower than it was in July 2008, a rapid rise is not uncommon.

What GOES INTO GASOLINE’S PRICE?

There are many. The U.S. Energy Department says that more than half of all costs are accounted for by oil. This price can be largely determined by global supply and demand.

Consumers pay extra for the blending of ethanol, and for other additives. These costs have risen dramatically, says Tom Kloza from the Oil Price Information Service.

“Gasoline you get at the pump is really containing eight or nine different elements, all of which have increased in cost in recent months,” said Kloza.

About 17% comes from taxes. Federal gasoline taxes are 18 cents. However, the average state tax and fee is 30 cents. This varies from one to another (see GRAPHIC). GRAPHIC: States with Highest Gasoline Taxes, https://fingfx.thomsonreuters.com/gfx/ce/zgvomkxzzvd/Pasted%20image%201637703565469.png

HOW DO RELEASING CRUDE RESSERVES AFFECT FUEL PRICES

According to U.S. officials, the release from U.S. Strategic Petroleum Reserve will be a mix of loan and sale to companies for a total 50 million barrels.

As the market anticipated news of an imminent release, oil prices fell for several days. Because it takes time to get a strategic release into the refinery, pump prices are unlikely to fall for drivers heading to Thanksgiving in the United States.

“It is unlikely the price relief will be passed down to consumers in the near short-term, unless the Biden administration prioritizes the release of gasoline stocks,” said Louise Dickson, senior oil markets analyst at Rystad Energy.

What else can be done to lower the price of the pump?

Florida Governor Ron DeSantis requested that lawmakers consider waiving gasoline taxes in response to rising gasoline prices. This is to help fund transportation infrastructure. Florida’s state total taxes and fees amount to nearly 35c, more than the average national.

“Other Republican-leaning states may follow suit, especially if they argue the revenues will be made up from funding within the federal infrastructure bill,” Kloza said.

WHERE ARE GASOLINE-PRICES HELD AFTER THE WEEK?

According to Kloza, although gasoline prices will likely fall in the next few weeks, a large part of this is due to lower winter demand.

U.S. gasoline consumers are likely to return to the pump when demand returns. However, after more than a year where many refineries were closed around the globe, oil refinery capacity will decline.

In his comments on the release of oil from strategic reserve, President Joe Biden stated that prices should be 25 cents less than now. In fact, retail prices are currently at $1.14 per gallon. It is the largest gap since April 2020. GRAPHIC: The gap between retail and wholesale gasoline costs, https://fingfx.thomsonreuters.com/gfx/ce/mopanlbzdva/Pasted%20image%201637167261249.png