Soaring gas prices have been a challenge since early this spring, but eventually came down. Are prices spiking again now?
Yes. The nation’s average price of gasoline was $4.25 a gallon as of Sept. 14, according to GasBuddy. The national average is up 19 cents compared to last month and $1.14 higher per gallon than a year ago.
In Illinois, the average gas price was $4.86 on Friday, according to AAA. The national average was $4.47 on the same date. For Chicago, the average price for regular gas is currently $5.14, AAA said.
Gas prices nationwide have returned to the highs seen this spring after the U.S. and Israel attacked Iran on Feb. 28 over disputes about Iran’s nuclear weapons program. Now the national average is closer to this year’s high of $4.56 on May 21. The all-time high for the national average is $5.01 set on June 14, 2022, said GasBuddy.
Why are fuel prices so high?
After the attack by the U.S. and Israel, Iran closed the Strait of Hormuz, the narrow mouth of the Persian Gulf. Twenty percent of the world’s oil supply passes through the Strait.
It’s the largest disruption the oil industry has ever faced, Sam Ori, executive director of the University of Chicago’s Institute for Climate and Sustainable Growth said this spring.
The International Energy Agency has said the combined impacts of the war in the Middle East and blockages in energy trade flows through the Strait amount to “the greatest threat to global energy security in history.”
Why did fuel prices spike recently?
Average gasoline and diesel prices rose in every U.S. state last week as geopolitical tensions escalated on multiple fronts, said Patrick De Haan, head of petroleum analysis at GasBuddy in a Sept. 14 blog post.
Tensions are ongoing between the U.S. and Iran. Then on Sept. 10, the Iran-backed Houthi rebel group took over Yemen’s port city of Mokha, an area vital to controlling shipping through the Red Sea, said the Associated Press. And on Sept. 11, Saudi Arabia said it had shut down the East-West pipeline after it was attacked by drones. The Saudi Foreign Ministry blamed the attack on several drones that came from Iraq, the AP reported.
In addition, Ukraine has been attacking Russian oil refineries for months. New attacks last weekend “also knocked two additional Russian refineries offline, further straining global refined product supplies and likely offsetting any seasonal relief,” said De Haan of GasBuddy.
Is gas cheaper in Indiana and Wisconsin than Chicago?
Yes, gas prices in Indiana are among the lowest in the U.S.
On Friday, Indiana’s average gas price was $4.00, said AAA. That was the second-lowest nationwide, behind Texas, which had the lowest average price in the U.S. at $3.95 on the same day.
Just north of the border in Wisconsin, the average gas price sits at $4.41, six cents below the national average and 45 cents cheaper than in Illinois, AAA said.
Illinois gas prices are often higher than the national average because it has the second-highest taxes on gas in the country, according to Illinois Policy. Five states, including Illinois, have a motor fuel tax. Revenue from that tax helps maintain and build Illinois roads.
Where to buy cheaper gas around Chicago?
GasBuddy, which also has an app that tracks the lowest gas prices in a city or region, shows several areas in Indiana near Chicago where drivers can fuel up for just under the state and city average price.
A Citgo at 11600 S. Michigan Ave. in West Pullman, a Shell at 10655 S. Halsted St. in Roseland, and a BP at 4000 W. Peterson Ave. in North Park were all charging under $4.70 per gallon for regular gas on Friday, GasBuddy showed.
The app provides a list of gas stations by price and location that is updated hourly.
Why are prices different at various gas stations?
Gas stations, which are often independently owned, typically price fuel based on how much it would cost to replace it or how much the next shipment of fuel will cost, according to the National Association of Convenience Stores.
Within reason, retailers can set fuel prices themselves, but Chicago drivers can report suspected price gouging to the city’s Department of Business Affairs and Consumer Protection.
Will gas prices continue to rise?
Most of the U.S. is shifting to cheaper winter-blend gasoline, but ongoing geopolitical tensions make relief unlikely in the near term. “Motorists should brace for continued volatility ahead,” said De Haan of GasBuddy.
Think regular and premium prices are high? Diesel is even higher.
The national average price of diesel reached $6 a gallon for the first time in history last week. “It is a level diesel has never reached, and it comes less than a week after prices set a fresh all-time record of $5.85,” said GasBuddy on Sept. 10 in a blog post.
Diesel prices could climb even higher in the wake of fresh attacks on Russian refineries.
On Friday, the national average price for diesel hit a record high of $6.45, according to AAA.
On Sunday, U.S. President Donald Trump called on Ukrainian President Volodymyr Zelenskyy to halt strikes on Russian refineries that produce diesel, saying the attacks are causing a global shortage.
Consumers feel the strain of high gas prices at the pump. But spiking diesel prices have far-reaching economic impact.
“Diesel is the fuel that moves the economy, powering the freight trucks, trains, agricultural equipment and construction machinery behind nearly everything Americans buy. That means its impact reaches far beyond the transportation sector,” GasBuddy said.
That can translate into steep prices for groceries, household goods, deliveries and other products. That’s on top of already-high inflation that many are struggling with.
Contributing: AP
