Gas Prices Are Driving Highest Inflation Rate In 40 Years

The price of gas is displayed on a sign at a Shell gas station in Washington, DC, on April 12, 2022. - Americans paid more for gasoline, food and other essentials last month amid an ongoing wave of record inflation made worse by Russia’s invasion of Ukraine, according to government data released Tuesday.

The price of gas is displayed on a sign at a Shell gas station in Washington, DC, on April 12, 2022. – Americans paid more for gasoline, food and other essentials last month amid an ongoing wave of record inflation made worse by Russia’s invasion of Ukraine, according to government data released Tuesday. Photo: Photo by STEFANI REYNOLDS/AFP via Getty Images (Getty Images)

A double whammy of inflation and gas prices are pushing Americans already living paycheck-to-paycheck to the edge. You might be blaming higher prices on supply chain problems — which makes sense when everything is more expensive — but it’s actually the price of oil driving inflation.

The price of some items, like electronics and cars, are starting to fall, but at 18 percent price boost, gas prices jumped up far above the general consumer price hike of 8.5 percent last month, according to QZ:

US consumer prices in March rose 8.5% from the same month last year, marking a 40-year high—and were up 1.2% from February. Minus food and energy, prices increased 0.3% month-over-month.

“Gas prices alone accounted for more than half of the monthly increase in the CPI,” said Greg McBride, chief financial analyst at Bankrate.

Used car prices fell by 3.8% from February to March, while the cost of smartphones fell by 4.2%. TVs also fell by 2.4% and audio equipment such as video cameras and microphones fell by 2.3%.

This is a sharp reversal from 2021’s surging prices for durable goods, which saw used cars increasing by more than 10% in one month, and TVs increase by 13% in one year.

So what’s happening? The conflict in Ukraine for starters. There’s a lot more demand now that most of Europe isn’t buying Russia oil, though the price of a barrel of oil is on it’s way down following a price peak of $4.33 in March. Two weeks ago, Biden approved the release of a million barrels of oil from strategic reserves every day, essentially increasing worldwide oil supplies by one percent. He also announced on Tuesday that the Environmental Protection Agency will allow E15 gas to be sold during the summer months. The ethanol heavy fuel is normally only sold in winter, as emissions from E15 fuels can increase smog, especially when exposed to sunlight and heat.

Unfortunately there isn’t much a president can do to affect a globally traded commodity. Experts told the Washington Post the problem isn’t going away any time soon:

But Larry Summers, who served as treasury secretary under former president Barack Obama, said the administration has a limited number of options to slow rising prices. That suggests Biden and the Democrats may struggle to put any significant dent in the problem before November’s congressional elections.

“We have a serious inflation problem in the United States,” said Summers, an occasional Biden confidant. “The problem didn’t get made in a week or month, and it’s not going to be resolved quickly — or without pain.”

Summers said Biden faces a “perfect storm” fueled by what he called “macroeconomic policy errors from 2021” — a reference to what he sees as a mistaken decision to pump too much money into the economy — along with the Russian invasion of Ukraine.

“It’s an extremely difficult situation to deal with,” he said.

To add insult to injury, American oil companies, like Exxon-Mobile, are reporting record profits while normal citizens are shelling out $4.08 for a gallon of regular unleaded as of this writing. And with that, we take a peak at the gas price numbers around the country:

Here are the highest average gas prices in the country in order of highest price for a gallon regular:

Here are the lowest average prices of gasoline in the country in order of lowest price per gallon of regular:

Far too slowly, the prices are coming down. Some experts are predicting gas will fall below $4 in the coming weeks, but with something as unpredictable as a war affecting prices, it’s really anyone’s guess.