Americans are feeling pain at the gas pump again, and consensus is rising that the pain won’t be easing anytime soon. If traders, analysts and industry executives are right, consumers could be looking back on the current AAA national average price of $3.54 (as of March 28) with nostalgia in a couple of years.
Upwardly mobile gas prices are nothing unusual at this time of year. They almost always rise as refineries make the changeover from winter gas blends to the far more numerous summer blends mandated by EPA haze regulations, and many undergo periodic maintenance to be ready for the summer driving season to come.
This year, the upward pressure on prices is more intense thanks to global events and market factors creating a kind of perfect storm in the near term, and an even more difficult supply and demand outlook for the longer term.
Let’s review some of those factors:
Shipping disruptions – Ongoing attacks by Yemen’s Houthis on shipping traffic moving into and out of the Red Sea continues to deny container ship and oil tanker traffic access to the Suez Canal, forcing the ships supplying the North American and European markets to take the long way around Africa. This raises shipping and supply costs on the industry that end up being passed through to retail customers at gas stations.
INTERNATIONAL WATERS RED SEA, YEMEN – NOVEMBER 20: This handout screen grab captured from a video … [+]
HOUTHI MOVEMENT VIA GETTY IMAGES
The previous worldwide gasoline usage peak was in 2019 before the Pandemic.
• Today, there are 30 million EVs on the world’s roads that are owned by the elites that can afford them, and are mainly 2nd vehicles parked in the garage, or with low mileage usage, vs the high mileage workhorse vehicles that are internal combustion engines.
• Today, there are also hundreds of millions of workers that now work virtually since the Pandemic and thus do not “drive” to work as often.
Well, even with those 30 million EV’s and millions of workers not driving as much, gasoline usage continues to rise. The International Energy Agency (IEA) reports that global gasoline consumption in 2023 blew past the pre-lockdown 2019 peak !
By re-enforcing the mandates to EV’s, Biden is forcing automobile manufacturers into a death spiral, as most of the 8 billion on this planet will never be able to afford an EV !
In the UK, they are currently, on average, £1.50 per litre