Gasoline prices surged to the highest level on record Tuesday as oil holds steady above $100 a barrel, contributing to inflationary pressures across the economy.
The national average for a regular gallon of gas hit an all-time high of $4.374 on Tuesday, according to AAA. The price is not adjusted for inflation.
Prices have been rising at a fast clip, with the ascent accelerating after Russia invaded Ukraine, sending energy markets reeling.
The national average crossed above $4 in March for the first time since 2008, and has remained above ever since.
Consumers are now paying $1.41 more at the pump than last year.
In some places, the move is far more extreme. In California, for instance, the state average now stands at $5.84. A handful of counties in the state have topped $6.
Diesel prices, meantime, are also surging. The national average hit $5.55 per gallon on Tuesday, also a record. Prices have hit a new high for at least the past seven days.
West Texas Intermediate crude futures, the U.S. oil benchmark, traded around $101.66 per barrel Tuesday. That’s significantly off its recent high around $130 per barrel in March.
But while oil accounts for more than 50% of the cost per a gallon of gas, it’s not the only factor. The industry is grappling with the same pressures playing out in the rest of the economy, including labor constraints.
Refiners, which turn oil into everyday products including gasoline and jet fuel, are running near maximum capacity. The U.S. refining capacity has declined over the last few years, and now Europe is competing for the same petroleum products as it seeks to move away from Russian energy.
Andy Lipow, president of Lipow Oil Associates, forecasts prices for regular gasoline rising another 15 to 20 cents over the next two weeks, ultimately hitting $4.50 per gallon.