- Gas prices in the US have sky rocketed to all-time highs, exacerbated by the lifting of COVID-19 restrictions and Russia's invasion of Ukraine.
- Prices have exceeded the $4 per gallon mark for the first time since 2008.
- Gas prices vary substantially from state to state due to differences in state taxes.
- California has the highest average price at $5.86 per gallon, and Kansas has the lowest at $3.77 per gallon.
Gas prices in America at all-time high
In recent days, gas prices have skyrocketed to all-time highs.
According to the American Automobile Association (AAA), the national average price of regular unleaded gas has reached $4.25 per gallon as of March 21st, 2022. This is the first time since 2008 that gas prices had exceeded the $4 per gallon mark.
The price of gas was already rising two weeks before the Russian invasion of Ukraine, owing to the increased demand due to the lifting of COVID restrictions. But when the war broke out, the price of regular gas jumped 41¢ during the first week. This surge in prices could add up to $2,000 in annual cost to the average American household.
While the price at the pump sits at $4.25 per gallon on average, it’s worth mentioning that prices range quite substantially depending on the state. California has the highest average price at $5.86 per gallon. On the other extreme, Kansas has an average price of $3.77 per gallon.
Where is gas the most expensive in America?
There are eight states where gas prices are above $4.50 per gallon, and three states where the price is above $5: California, Hawaii, and Nevada.
Here are the 10 states or districts with the highest gas prices:
Where is gas the least expensive in America?
There are 16 states where gas prices are under $4 per gallon. Here are the 10 states with the lowest gas prices:
There are a few reasons why gas prices can vary from state to state. State taxes play a big role in the final price at the pump, and they can range from 57.6¢ per gallon in Pennsylvania to 8¢ per gallon in Alaska.
Proximity to refineries is another contributing factor for cheaper gas. States like Texas, Louisiana, Mississippi, and Alabama often have lower prices than other regions.
When will gas prices in America go down?
Gas prices were on the rise due to an oil supply shortage. When war broke out, there was an additional price surge due to sanctions or bans on Russian oil exports by the West.
It’s also worth noting that even as the price of oil begins to fall once again, there is typically a lag before prices at the pump begin to ease for consumers.
The Energy Information Administration projects that average spot price of Brent crude oil will be $105.22 per barrel this year, a $22 difference compared to its original February forecast. As a result, many experts are expecting that gas prices could stay near or above $4 per gallon for the rest of the year.
What's the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.
Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.
Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.
Is your organisation interested in working with the World Economic Forum? Find out more here.