PORTLAND, Ore. (KOIN) — Despite a drop in gas prices since the record highs reported in March, experts suggest sticker shock at the pump is likely here to stay –as this week the national average cost of fuel rose to $4.13 per gallon of regular unleaded.
As of April 26, AAA reported the average cost of a gallon of regular unleaded gas rose three cents nation-wide.
While the report shows average price in Oregon held steady this week at $4.67 per gallon of regular, however the new national uptick comes just after Oregon experienced a similar incremental price increase last week.
“The national and Oregon averages are both a bit lower than their record highs set last month,” AAA reported. “The national average peaked at $4.331 on March 11 while the Oregon average peaked at $4.739 on March 11.”
Although both the national and state-wide average prices only rose by a few cents over the past two weeks, Marie Dodds, Director of Government and Public Affairs for AAA (Oregon/Idaho) said she expects local drivers will continue to experience higher than normal gas prices for as long as the conflict in Ukraine continues to elevate the price of crude oil.
“The recent dip in gas prices has reversed as crude oil prices remain stubbornly elevated,” Dodds stated. “Upward pricing pressure on concerns that less Russian oil will enter the global market is countered by fears of a COVID-induced economic slowdown in China, the world’s leading oil consumer. These opposing forces are causing the oil price to remain near $100 per barrel.”
Dodds told KOIN 6 News, if these major market forces continue to drive crude oil prices, Oregonians can expect to feel the impact as they pay for the market disruption – quite literally – in the form of increased prices at local gas stations.
“Crude oil accounts for about 53% of what we pay for in that gallon of gas,” Dodds said. “As the main ingredient in that gallon of gas that we buy at our local gas station, crude oil prices play a huge role in determining pump prices.”
According to AAA, Oregon residents still pay more for gas than most of the country, as this week’s report revealed the state continues to have the fifth-highest gas prices in the nation.
Even as gas prices in Oregon and across the nation remain relatively high at above $4 per gallon, Dodds said the demand for fuel has increased.
“We are seeing demand for gasoline rise a little bit,” Dodds explained. “We are consuming close to 8.9 million barrels a day here in the U.S. -and it’s interesting to note that demand has increased over the last couple of weeks.”
Dodds said she believes this rise in demand could be fueled by three factors, including a decrease in prices after the record highs reported in March, a spike in travel as the weather warms, and increased traffic and travel as the country exits the COVID-19 pandemic.
“While gas prices are still way too elevated for just about everybody, they are less than what they were a month ago so people might be thinking it’s a relative bargain,” Dodds explained. “And this is the time of year we tend to see travel and miles traveled increase as the days get longer and the weather theoretically gets better, so people do tend to drive more.”
As more residents fill up their tanks, Dodds said production has not been able to keep up with the increased demand, as the global supply of crude oil was already tight.
She added that the conflict in Ukraine has only exacerbated supply issues, saying, “you factor in a war involving a major oil producer and prices for oil go through the roof, and that’s what we’re seeing.”
Due to the increased demand, oil supply shortage, and growing global tensions Dodds said prices at the pump are unlikely to drop in Oregon and across the U.S., adding that if the state of Eastern Europe remains unpredictable, fuel costs will continue to reflect that uncertainty.
“What’s going on in Ukraine is just hard to watch, and it can be difficult to comprehend everything that’s going on and how it impacts what we pay for gas,” Dodd stated. “It’s important for people to realize that crude oil is bought and sold on the global markets and global events can and do impact those prices. It is frustrating for folks to see those gas prices rise dramatically, but there are world forces at play here, which determine the cost of crude oil and unfortunately, we all end up paying those higher prices because of that.”
She added, “I think it’s safe to assume that unfortunately, these high oil and gas prices are going to be with us for the coming weeks because the bottom line is, nobody knows how the situation in Ukraine is going to unfold.”