Crude oil prices driving gasoline prices
The strain on crude oil supply caused by the absence of Russian product in the world market is driving consumer gasoline and diesel fuel costs to record highs.
The average price of gasoline in the county on Wednesday, according to AAA, was $4.48 per gallon, which is slightly lower than the state average of $4.56. Both are higher than the national average of $4.40.
The $4.56 state average cost of gasoline and the $6.24 per gallon state average for diesel are the highest recorded, according to AAA.
A month ago, the state average price for gas was $4.21 a gallon and the average price for diesel was $5.37 a gallon.
“What’s diving gas prices is crude oil,” said AAA spokesperson Jim Garrity. “Fifty to 60 cents of every dollar spent at the pump is due to oil prices.”
Crude prices began creeping up 2021 and have risen sharply since Russia invaded Ukraine in February to $100 to $110 a barrel, he said.
The average cost of crude oil in the country has risen from $39.68 in 2020 to $97.24 so far this year.
The United States and many other countries have or are considering banning Russian oil imports as a sanction for attacking Ukraine.
“Until you see crude oil prices cool off it stands to reason prices will continue to increase especially going into the time of year we're going into,” Garrity said.
Russian oil makes up only 6% to 7% of the crude used in the United States, but accounts for 40% of the amount used in Europe and 15% worldwide, which is causing suppliers to ship product worldwide to replace the Russian oil, said Dell Cromie, president of Glassmere Fuel Service of Tarentum, which supplies fuel to gas stations, trucking companies and other businesses in western and central Pennsylvania.
“We all know when supply gets scarce, prices go up,” Cromie said.
He said Glassmere’s suppliers are saying supply is not an issue right now.
In addition, Cromie said he has seen reports of gasoline prices being higher in other parts of the state.
According to AAA, gas prices range from $4.52 per gallon to $4.59 in central Pennsylvania and from $4.59 to $4.66 in counties along the eastern border.
“Right now we should feel a little lucky,” Cromie said.
The typical summer increase in demand for gasoline could push prices higher, he said.
Cromie said his suppliers are telling him that diesel could be in tighter supply this summer in the United States. He said there is more demand for it in Europe because more diesel-powered vehicles there.
Typically, diesel costs 10 to 20 cents more that gasoline, but the difference is now $1.
“It's a bigger spread than I’ve ever seen,” Cromie said. “I’ve been in this business for 44 years I never thought I’d see the day when diesel fuel costs $6 a gallon.”