A combination of tighter supplies and higher oil prices contributed to a recent price spike.
WASHINGTON, D.C. — After several months of little change, the national average gas price jumped 13 cents to reach $3.71 for a gallon of regular gasoline as of July 27. This is primarily due to the price of oil, which surged nearly $4 per barrel in recent days to approach $80 per barrel.
As oil accounts for nearly 50 percent of the cost of a gallon of gas, rising oil prices usually mean rising pump prices, reported AAA.
"Gas demand, meaning people fueling up, remains tepid. It's lower now than at this time last year and in 2021," said Andrew Gross, spokesperson for AAA. "But while the heat may be keeping some folks home, it also suppresses refinery production, according to experts. Constrained supplies and a higher cost of oil are tipping the balance toward rising pump prices for now."
New data from the U.S. Energy Information Administration shows that gas demand recently rose slightly from 8.86 million barrels per day to 8.94 million barrels per day at the same time that total domestic gasoline stocks fell from 218.4 million barrels to 217.6 million barrels. When gasoline supplies are tight, if demand spikes, prices at the pump will rise accordingly.
The current national average of $3.71 is 15 cents more than one month ago but 59 cents less than one year ago.
The 10 states with the largest average gas price increases on the week are Indiana (+23 cents), Iowa (+20 cents), Florida (+20 cents), Ohio (+19 cents), Georgia (+19 cents), Kansas (+18 cents), Tennessee (+18 cents), Texas (+18 cents), North Carolina (+18 cents) and South Carolina (+18 cents).
The current top 10 most expensive markets are California (an average of $4.93 per gallon), Washington ($4.93), Hawaii ($4.69), Oregon ($4.59), Alaska ($4.31), Nevada ($4.24), Utah ($3.94), Idaho ($3.89), Illinois ($3.95) and Colorado ($3.92).