Commodities & Metals

Gas Prices Up Double Digits

Douglas A. McIntyre

Published: March 6, 2024 7:10 am

After months of drifting downward, mainly due to falling oil prices, gasoline prices are up again. The trend is likely to continue. Last week, the average price of a gallon of regular nationwide was up $0.10 to $3.34. The increase in the past month was $0.22. (Here is the cost of gasoline the year you were born.)

Patrick De Haan, head of petroleum analysis at GasBuddy, was not entirely surprised: “A majority of the nation’s 50 states have seen gasoline prices rise, with the national average posting a gain for the second straight week, a trend that is hardly surprising for this time of year, and will likely continue as the entire nation has now made the first step toward summer gasoline.” However, other problems are lurking.

Oil prices have risen sharply in the past month. They have increased from $73 a barrel to nearly $79.

Among the largest problems affecting oil prices are slow traffic, or no traffic for some oil tankers, through the Suez and Panama Canals.

Panama is plagued by drought that has made the passage too shallow for the normal number of ships it handles daily. Attacks on ships in the Red Sea have hampered passage to the Suez Canal. Recently, a ship was sunk by Houthi rebels. An anti-ballistic missile struck the cargo ship Rubymar, which carried fertilizer. It could just as easily have been carrying crude.

The Panama Canal problem may not worsen quickly. The Suez Canal problem could. U.S. and U.K. forces continue to combat the Houthi rebels, but these efforts have only been partially successful.

The formula is simple. High oil prices mean high gasoline prices.