The average price of premium gasoline at the pump has surpassed US$5 a gallon for the first time in the United States, the American Automobile Association (AAA) reported Saturday (Jun 11).
That record level, coming on top of months of soaring inflation, represents the latest bad news for President Joe Biden just five months before crucial midterm elections.
A year ago, the average price of gas in the US was just US$3.07; since then it has shot up by 62 per cent.
While Europeans have long been accustomed to paying much more at the pump, US gas taxes are lower – leaving car-loving Americans in shock over surging prices.
The increase in gas prices follows a steady rise in oil prices – which had plummeted in the early days of the COVID-19 pandemic as demand sagged, but have risen again as world economic activity resumes.
Oil prices soared further after Moscow invaded Ukraine in late February, and as international sanctions against Russia – a major petroleum producer – began to bite.
A barrel of crude currently sells for more than US$120 in both London and New York.
Overall US energy prices in May were nearly 35 per cent higher compared to the same month in 2021, according to government data.
This has contributed to the overall rise in US consumer prices, which were up 8.6 per cent in May from a year earlier – a 40-year record.
As the summer vacation season nears, Americans – with their longtime love affair for big gas-guzzling vehicles – can expect to see energy prices rise still further.
That will pile even more pressure on consumers already struggling with higher prices for food (up 10.1 per cent in May), housing, automobiles and health care.
All this complicates Biden’s position. For months he has sought to reassure Americans that his administration is doing everything in its power to bring down prices without derailing the economic recovery.
But in November, Americans vote to elect all members of the House of Representatives and one-third of senators – and polls show voters listing the economy, inflation and high gas prices as their top issues.
On Friday, the president again lashed out at the American oil industry, cautioning it in a statement “not (to) use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes.”