Why Are Gas Prices So High?

This story talks about the events and variables that have had an impact on gas prices in the United States.

This picture was taken at a gas station on 2410 N Academy Blvd, Colorado Springs, and shows the price of gas currently.

Nicholas McCarthy

This picture was taken at a gas station on 2410 N Academy Blvd, Colorado Springs, and shows the price of gas currently.

Gas plays a big part in the modern world of transportation. A large majority of people within the United States use gas-powered vehicles as their main source of transportation. However, gas prices within the last year have gone up drastically per gallon. Anyone that has been driving for a while would know that gas prices have not been this high for a long time, specifically since 2012. There are many variables that go into gas and how much it’s sold per gallon, but the question is, what’s affecting these variables?

“I drive a 2005 Saturn Vue and it costs $46 to fill the tank, which isn’t that bad but it’s a lot more than I used to pay for gas,” junior Ella Bundgaard stated.

Something that has had a big impact on not only the oil industry, but all industries within the last year is COVID-19. Originally, due to COVID-19, gas prices dropped because people were working remotely and not driving as much, but now that people are getting back into going out there is a high demand again. With all the mandates and a shortage of workers, fewer products are being imported and exported from the United States. Instances of this include crude oil, which is the primary ingredient for gasoline. 

After the drop in gas prices in 2020, oil refiners cut their production by 40% in fear of the gasoline demand never returning. As the demand returned, the oil industry did not have the means to meet that demand, creating a scarcity of crude oil. The oil refineries have yet to return to full gas production, meaning that it will take time before gas prices reach the price they were prior to the pandemic. 

“During Covid, lots of business such as the oil industry shut down or slowed down production, and then when the economy started recovering those businesses weren’t capable of meeting the needs of the supply chain,” AAHS math teacher, Laurilyn Gregerson, commented.

Another reason gas prices are spiking right now is due to the situation in the middle east. The United States sources a large majority of its oil from countries in the middle east such as Iraq and Saudi Arabia. From the United States relying heavily upon the assets in the middle east, this potentially means that those countries can raise the price of oil, overall making gas prices higher.

“I think that the Middle East’s lack of co-operation with the United States is a big reason as to why the gas prices have spiked so much, and we don’t exactly see eye to eye with the Middle East so it’s easy for them to raise the price of oil,” Gregerson noted.

Early into his presidency, President Joe Biden also put a halt on oil and gas lease sales in the nation in attempts to help with climate change. Gas and oil leases are essentially an authorization of the exploration and production of oil on either private or federal property. Moreover, during 2021, no new leases were being authorized for federal property.

Consequently, the mining of oil not only supplies the states with gas, but also generates millions of dollars that goes towards the funding of schools, roads, and other needs from the state. 

Oil is one of the most used natural resources in the world. From heating our homes to powering our cars, oil makes our modern world run. Despite all the variables that affect the gas prices, as a country, the nation is working towards making a recovery and making the economy and prices better overall.