Riding another wave of pain at the pump
Published 6:06 pm Tuesday, October 26, 2021
If you feel a pinch in your pocket, most likely it’s another round of price hikes….from groceries, to fast food, and to the gas pump.
We’ve been there before. I can recall writing several columns about rising gas prices over the years.
Gas is perhaps the most scrutinized commodity there is worldwide. One day, the oil rigs are pumping at full throttle and the refineries are humming along at 100 percent. It almost seems like overnight, oil production is slashed and the refineries either shutdown completely or drastically reduce their daily output due to some unforeseen natural or man-made disaster. Heck, we’ve all seen gas prices rise for no reason at all!
Then there are times – as we experienced earlier this year – there’s a glitch in the pipeline that serves a certain region of the country. That leads to two things: shortages and panic buying….the latter is perhaps more painful than the first.
But back to the present.
On Monday (Oct. 25), Patrick De Haan, head of petroleum analysis for GasBuddy, said that North Carolina gas prices have risen 13.7 cents per gallon in the past week, averaging $3.23 per gallon. GasBuddy conducts a daily survey of 6,092 stations in North Carolina. That survey shows prices in North Carolina are 29.1 cents per gallon higher than a month ago and $1.30 per gallon higher than a year ago.
“Gas prices continued to soar in a majority of the nation over the last week as oil’s meteoric rise pulls gasoline and other refined product prices higher. But, there may be some light at the end of the tunnel,” said De Haan. “The sharp rise we’ve seen over the last three weeks should begin slowing down soon, barring another jump in the price of oil. This is because gasoline prices have now largely caught up to the jump in oil that started nearly a month ago. This isn’t an all clear for the future, however, as oil prices could rise again at any time. But for now, oil has held around $83 per barrel, and without a further climb, gas price increases should slow down soon in the bulk of the nation.”
To show the roller-coaster ride we endure with gas prices, De Haan provided the numbers on October gas prices (state averages over the past 10 years. They are as follows:
Oct. 25, 2020: $1.93/g
Oct. 25, 2019: $2.38/g
Oct. 25, 2018: $2.68/g
Oct. 25, 2017: $2.30/g
Oct. 25, 2016: $2.19/g
Oct. 25, 2015: $2.08/g
Oct. 25, 2014: $2.97/g
Oct. 25, 2013: $3.28/g
Oct. 25, 2012: $3.55/g
Oct. 25, 2011: $3.42/g
Writing in Forbes on March 6 of this year, Robert Rapier noted that the national average for a gallon of gas stood at $2.71. He stressed that while it was true that gas prices have increased over the first quarter of 2021, those hikes were not attributed to Joe Biden being in the White House.
Rapier noted that gas prices rise and fall based upon the price of a barrel of oil.
He wrote that on the first trading day of January 2021, the price of West Texas Intermediate (WTI) closed at $47.47 per barrel (bbl). Two months later, on the first trading day of March, the price closed at $60.54/bbl. During that time gasoline prices rose by $0.46/gallon, the price of oil rose by $0.31/gallon.
As of the close of Wall Street trading on Oct. 20, the per barrel price of WTI stood at $83.87 (up 91 cents over the previous day).
Rapier also observed other factors that have driven up the price of oil.
“One is that demand collapsed last year as pandemic measures were implemented and people stopped traveling,” he wrote. “The price of oil plummeted. That, in turn, ended up idling 3 million barrels per day (BPD) of U.S. oil production relative to a year ago. As the end of the pandemic nears, oil demand is bouncing back. Supply doesn’t respond as quickly, and therefore that puts pressure on prices.”
While it’s true that Biden doesn’t control the price of crude oil, his policies have a direct impact on that commodity.
When questioned about the spike in gasoline prices at the CNN town hall last week, the president remarked that it ultimately depends on Saudi Arabia and the other OPEC nations.
Biden told CNN’s Anderson Cooper, “I don’t see anything that’s going to significantly reduce gas prices right now. My guess is you’ll start to see gas prices come down as we get by going into the winter, I mean excuse me, into next year in 2022.”
Meanwhile, just one month earlier, CBS News reported that Biden was calling for an investigation into persistently high gasoline prices. At that time, with the national average price of gas having climbed to $3.17 a gallon, Biden suggested that pandemic “profiteers” might be to blame, as CBS noted in its report on Sept. 17.
“There’s lots of evidence that gas prices should be going down — but they haven’t,” he [Biden] said. “We’re taking a close look at that.”
Yet experts say there’s little evidence of anything nefarious behind the higher fuel cost, according to a story authored last week by Advance America reporter Elizabeth Stauffer:
“Although gas prices have atypically remained elevated after Labor Day, when prices at the pump usually fall following the peak summer driving season, analysts blame other factors, including lower global production and supply disruptions in the US,” Stauffer wrote.
She claimed that the lofty prices Americans are paying at the pump didn’t happen by accident.
“This has been part of the progressive plan for years,” Stauffer said. “Simply put, Democrats are convinced that if they can drive up the prices of fossil fuels to prohibitive levels, consumers will seek alternatives like electric cars.
“Nine months ago, Biden was handed a country that was no longer dependent upon middle eastern tyrants for oil, the lifeblood of the U.S. economy. On day one, this administration set out to reverse that,” she added.
David Blackmon, an energy analyst for Forbes, wrote in March that the prices of fossil fuels began rising as soon as Biden won the election. Well aware of his administration’s planned policies, traders began driving up prices.
“The traders were right. Hours after receiving the greatest honor of his life, Biden scribbled his name on an executive order revoking the permit for the Keystone XL pipeline,” Stauffer wrote. “Another executive order placed a 60-day moratorium on new oil and natural gas leases and drilling permits on federal lands and waters.”
When and where this roller-coaster ride ends is just as much your guess as it is mine. The same goes for your opinion on whether or not the resident at 1600 Pennsylvania Avenue directly or indirectly impacts the price you and I pay at the gas pump.
I hate to be the bearer of more bad news, but the average price of gas in California stood at $4.54 per gallon, according to a report by AAA this past weekend. That’s only 14 cents per gallon shy of setting the all-time record in that state ($4.67 per gallon in 2012).
Let’s all hope that level of gas prices remains on the left coast.
Cal Bryant is the Editor of Roanoke-Chowan Publications. Contact him at email@example.com or 252-332-7207.