With the world opening up once again and summer is just around the corner, people find themselves leaving their houses more and more. To the dismay of many, gas prices have continued to rise throughout May.
Why Are Prices So High?
Although gas prices do typically tend to increase during the warmer months of the year, the current rising prices cannot be attributed to this trend. Earlier this month, the Colonial Pipeline was digitally hacked. Although the pipeline itself did not suffer any damage, operations were shut down in an attempt to minimize the damage and fix their systems.
The consequences were very severe given that the Colonial Pipeline provided gas for nearly half of the nation, and as a result, its effects were felt all across the country. The East Coast was hit the hardest, where Washington DC experienced 73% of their gas stations unable to dispense gas due to a shortage (AP News). To combat the shortage for themselves, many rushed to gas stations hoping to fill their tanks in fear of running out, thus creating long lines at the stations with gas and using the remaining supply quickly.
The demand for gas has only grown during this period of shortage. As the American Automobile Association recognizes provided new data from the Energy Information Administration, “gas demand increased from 9.22 million b/d to 9.58 million b/d last week.” A likely contributor to this fluctuation is Memorial Day since families often chose to travel over holidays. This will further promote the climb of the unsteady prices towards the end of May, possibly leading over into June.
Jeanette McGee, a spokesperson for the American Automobile Association, supports this prediction claiming, “AAA expects 37 million Americans to travel, mostly by car and plane, for the Memorial Day holiday weekend. That is a 60% increase over last year’s holiday and a strong indication that summer travel is going to be largely popular.”
Is Relief Coming?
Across the nation, automobile owners are shocked by the amount it currently costs to fill their tank. This raises an important question: do the gas prices look like they are going to deflate any time soon?
There is no clear answer.
Although the pipeline has been restored and there is not necessarily a gas shortage currently, there is still the lasting effect of the disruption in the gas flow which may take a while to even out.
According to Scott Sheffield, the chief executive of Pioneer Natural Resources (located in Texas), American oil production is going to remain at a flat of 11 million barrels a day this year. This is a significant decrease when compared with the 12.8 million barrels daily before the pandemic. As restrictions continue to be lifted with the distribution of the vaccine and overall cases decline globally, this could greatly hinder many Americans’ travel plans because cost becomes an important issue to many. These continuous price raises met with a lower supply will eventually add up, proving to be more than previous summers.