It’s back: the average cost for a gallon of gas has increased — again — to $4 in Halifax County, according to AAA.
This comes after a steady decline from records set in March after Russia’s invasion of Ukraine rattled global markets and sent the price of crude oil skyrocketing.
There’s another painful punch lurking: the price of diesel — known as the “fuel that moves the economy” — surpassed $5 a gallon last week.
“For now, the rising cost of diesel will surely be felt in the grocery store, hardware store or on your next flight as jet fuel prices accelerate, leading to a continued rise in inflation likely to ripple across the economy,” said Patrick De Haan, a spokesperson for Gas Buddy.
On Monday, regular fuel prices increased 10 cents per gallon week-over-week in Virginia to reach $4.05. That’s $1.28 more than a year ago, according to AAA.
The recent rise is blamed on the stubbornly stagnant price of crude oil hovering about $100 a barrel, the benchmark for setting prices at the pumps.
“As long as the supply remains tight, it will be hard for crude oil prices to fall and consumers will in turn face higher prices at the pump,” Morgan Dean, a spokesperson for AAA Mid-Atlantic, said.
Also, fear of a global energy supply disruption due to Russia’s invasion of Ukraine is outweighing the demand concerns prompted by the impact of COVID-19 on China’s economy.
Nationally, prices climbed nearly 7 cents per gallon to average about $4.17 on Monday. That’s $1.29 higher than a year ago, according to GasBuddy.
The pressure is likely to keep pumping prices higher as long as crude oil stays above $100 per barrel. On Wednesday, it closed at $107.81 a gallon.
Across the country, gasoline demand nudged downward slightly, bucking the normal trend of increased travel heading into the summer. Normally a demand drop would lower fuel prices. However, the opposite is occurring thanks to a tight gasoline supply and fluctuating oil prices.
The diesel fallout
A week ago, diesel prices reached a new average all-time high of $5.16 per gallon, surpassing the previous record of $5.15 per gallon set on March 10, according to GasBuddy.
But that’s just one record.
Another record was set when diesel was $1 more than regular gasoline, edging out the previous high-mark of 98 cents in November 2008.
“While gasoline prices get much of the attention, diesel, which broadly is the fuel that moves the economy, has quietly surpassed its recent record high as distillate inventories, which include diesel and jet fuel, have plummeted to their lowest level in years,” De Haan said.
“There’s no quick solution as the economy has seen a robust turn around, made worse by Russia’s war on Ukraine as the West fences off Russia’s oil.”
The recent resurgence in diesel prices can be attributed to continued escalations in the situation and plunging inventories of oil and refined products, like diesel, along with recovering demand as goods move across the country, much of which is powered by diesel fuel in semi-trucks, trains and ships, according to Gas Buddy.