US Gasoline Prices Vault to 7-Year High

A customer prepares to pump gasoline into his car at a Valero station in Mill Valley, Calif., on July 12, 2021. (Justin Sullivan/Getty Images)

The U.S. price of regular-grade gasoline is continuing to rise, with the national average hitting a seven-year high.

As of Oct. 27, the national average rose to $3.394 per gallon from $3.389 the previous day, and up from the month-ago average of $3.189, according to AAA.

“With the U.S. economy slowly recovering from the depths of the pandemic, demand for gas is robust, but the supply is tight,” AAA spokesman Andrew Gross said in a statement. “We haven’t seen prices this high since September of 2014.”

The nation’s top five most expensive markets were, as of Oct. 27: California ($4.56), Hawaii ($4.29), Nevada ($3.93), Washington ($3.87), and Oregon ($3.78).

San Francisco gasoline prices, which according to AAA on Oct. 26 averaged $4.73 for a gallon of regular unleaded, appear poised to hit an all-time record.

GasBuddy head petroleum analyst Patrick De Haan wrote in a tweet on Oct. 25 that gasoline prices in San Francisco were just 1.2 cents shy of a new all-time high.

“It will be the first city to set a new record high for #gasprices since 2012,” De Haan predicted.

The Biden administration has faced sharp criticism over rising gasoline prices, but it has “no immediate plans” to tap into emergency reserves or limit energy exports outside the United States, the Energy Department told CNBC this week.

The Biden administration’s chief plan to ease surging high gasoline prices was to persuade OPEC-plus to agree to boost production more sharply to reduce the supply crunch, but, so far, that plan has failed.

“There are limitations to what any president can do, as it relates to gas prices,” White House press secretary Jen Psaki told reporters on Oct. 22, adding that the administration was continuing to engage with OPEC-plus countries to boost supplies.

Earlier in October, OPEC-plus announced it would hold fast to the terms of an earlier agreement to boost oil production gradually—by 400,000 barrels per day (bpd) for the month of November—ignoring calls from the Biden administration to pump more crude.

Meanwhile, oil prices fell by around 1 percent on Oct. 27 after industry data showed crude oil stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the United States.

The U.S. Energy Information Administration (EIA) stated in its most recent short-term energy outlook that it expects retail gasoline prices to fall to an average of $3.05 per gallon in December, an encouraging sign for drivers hoping for relief at the pump.

At the same time, the EIA expects WTI crude oil prices to average $68.24 per barrel in 2022, down only slightly from $68.48 in 2021 and far higher than the $39.17 in 2020 and $56.99 in 2019.

Brent crude prices are forecast to rise to an average of $71.91 per barrel in 2022 from $71.38 this year, up from $41.69 in 2020 and $64.34 in 2019.