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Why are gas prices rising? AAA says storm impacts, COVID optimism



Fuel costs have been deflated for the previous yr due to lowered journey attributable to the COVID-19 pandemic. Here is why specialists say the fee goes up now.

Filling up on the pump has gotten costlier in latest weeks. As of March 5, a gallon of gasoline averaged $2.75 within the U.S., a $1 leap from late April 2020. 

The gasoline worth hike has some questioning whether or not it’s due to a political agenda, a cash seize or one thing fully totally different.

THE QUESTION

Are the latest larger gasoline costs as a consequence of political adjustments within the White Home? Or are different components in charge?

THE ANSWER

No, politics or a change of administrations isn’t behind the worth leap, AAA spokesperson Jeanette C. McGee advised VERIFY. What’s propelling the latest will increase is crude oil costs and the snowstorm that shut down refineries in Texas, McGee says. 

WHY WE ARE VERIFYING

After seeing social media posts claiming presidential politics are at play, a number of viewers have requested if that’s actually the reason for climbing oil costs.

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WHAT WE FOUND

“Crude oil accounts for greater than half of the retail worth,” McGee stated. With a gradual rise in crude since November from $45 a barrel to $63 a barrel, “shoppers undoubtedly discover the rise on the pump.”

So what’s fueling the rise? 

It’s “the market’s optimism for the [COVID-19] vaccination, not a rise in demand,” in response to McGee.  

Moreover, the worth surge the final two weeks “is a direct results of the icy temperatures in Texas final month,” she stated. “That storm compelled 26 U.S. refineries offline and halted manufacturing.” Actually, the Vitality Info Administration reported that the refinery utilization throughout that point was at a report low of 56% and continues to be not again to 100%.

Some viewers have requested VERIFY about social media posts that blame the rise on the change in presidential administrations from Donald Trump, a Republican, to Joe Biden, a Democrat. McGee stated the worth strikes are “not a results of something political or with the White Home.”

Nor does the Keystone Pipeline section canceled by Biden have any impact, as a result of it was by no means constructed and thus didn’t affect provide, she stated.

A GasBuddy chart wanting on the common U.S. retail worth for the final 4 years exhibits that in the beginning of 2017, when Trump entered workplace, the worth was roughly $2.30. Its excessive level occurred June 1, 2018, at $2.97. Then, gasoline plunged to $1.74 in late January 2020 as COVID-19 lockdowns started world wide.

Taking a look at 2021, March will in all probability be one of the crucial costly months, with AAA anticipating gasoline to hit a U.S. common of $2.80 and pushing nearer to $2.90 in spring, she stated. However costs will fall as refineries come again on-line as long as crude sustains at decrease costs, she stated. OPEC hasn’t helped with its resolution this week so as to add minimally to manufacturing in April. For summer season, with extra drivers anticipated to hit the street, she stated costs will in all probability be lower than spring.

She famous that gasoline costs range regionally, with the West Coast tending to be the very best per gallon and the South and Southeast being the bottom on the pump.

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