As American households are crushed under the weight of rapid inflation and sagging economic growth, the Biden administration has yet to cool energy prices. By the end of the week, if not next, the national average for gasoline at the pump could cross another milestone: $5 a gallon.
As of Tuesday morning, gas prices at the pump climbed to a record $4.919, up 21% since mid-April of $4.07. The national average price for a gallon of gas last year was around $3.
AAA data shows thirteen states, including California, Oregon, Washington, Nevada, Arizona, Illinois, Indiana, Michigan, New Jersey, Massachusetts, Maine, Alaska, and Hawaii, including the District of Colombia, averaged over $5 a gallon on Tuesday morning.
On Monday, Andy Lipow, president of the consulting firm Lipow Oil Associate, told CNN that he expects the national average to breach the $5 mark within the next ten days.
Meanwhile, one gas station in California is just pennies away from $10, which is about double the national average.
And based on the 3-2-1 crack spread, which measures the difference in price between a barrel of crude oil and its byproducts, prices at the pump are about to head even higher.
Also, East Coast (PADD 1) ending stocks are seasonally at the lowest levels in 15 years as supplies remain tight because of sluggish refining capacity amid the peak driving season.
With the national average for gasoline approaching $5, Wolf Street's Wolf Richter has some good news:
A little demand destruction for gasoline has occurred, but obviously not enough to make a dent into the price spikes. The EIA reported — based on barrels supplied by refiners, blenders, etc., and not by retail sales at gas stations — that gasoline consumption, at 8.88 million barrels per day (red line) through May 27 fell by 3.1% from the same period in 2021, and by 6.2% from the same period in 2019:
To put all this in context, despite the crowing of The White House about rising wages, those purchasing power of those dollars is becoming weaker and weaker. The average hourly wage in America now buys less than 7 gallons on regular gas - its lowest since June 2014 - and almost one third of what it was at its peak purchasing power in April 2020...
Biden's attempts to keep prices down have failed... and so prices will likely rise further... As the old saw goes, 'the cure for high prices is... high prices' and so do not expect demand destruction (and market forces) to reduce gas prices until they are considerably higher. Given the weight of this concern amid America's voting public, it bodes even more poorly for the Biden administration (who just enforced the EPA to push his green agenda amid no 'green' emergency) as his ratings push to record lows..