Gas prices climbing to near historic rates

Summer travel season and the Russian invasion of Ukraine are driving gas prices up, officials say
Published: May. 11, 2022 at 7:23 PM CDT
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HUNTSVILLE, Ala. (WAFF) - Gas prices in Alabama are increasing again. This is the second price spike of 2022.

Prices are going back up because of the highly anticipated Memorial Day and summer travel season.

“We normally see increases this time of year because of that but I have to be honest the amount of the jump is more than we anticipated and more than we typically see this time of year,” said AAA Spokesperson Clay Ingram says

In one week, gas prices climbed by $0.25. The average price for gas in Alabama is $4.12, just four cents under the historic high set in March.

Ingram says the Russian invasion of Ukraine underpins the price hike.

“I think what we need to see happen to get these prices back down is to see that Russian Ukraine situation gets resolved and take all that volatility and anxiety out of the commodity’s market for crude oil,” said Ingram.

Only 8% of U.S. oil is imported from Russia, but it’s impacting the oil supply in Europe which increases the price of crude oil. Before the Russian invasion, a barrel of oil cost $50 to $70 but now it’s over $100.

“Even though we don’t have supply issues in the U.S., we still have to pay that global price of crude oil, said Ingram. “It’s a globally traded commodity just like everybody in the world has to pay. There’s no way around that there’s no exemption of that.”

Many people are facing quickly increasing prices while their wages are staying the same. The U.S. Bureau of Labor Statistics is reporting that inflation is quickly rising.

Federal officials are trying to bring prices down. UAH Economics Professor Dr. Wafa Orman says the Federal Reserve is increasing interest rates to bring inflation down. According to the Consumer Price Index report for April, costs rose by 8.3% in a year.

“From the federal reserves point of view, the reason they’re raising interest rates is to slowly gently pull back spending and at the same time encourage people to save more,” said Dr. Orman.

Increased interest rates mean it will be more expensive to borrow money to make big purchases like a house or car.

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