AAA – Current Gas Price Increase is Highest Ever in a Month

AAA considers the increase in the current gasoline price as the steepest climb in a month since they began tracking prices at the pump in 2000.

The current gasoline price of regular unleaded is $3.67, an increase from $3.38 in the past month. Diesel prices also have seen a similar increase.

Analysts of the oil industry attribute the sudden increase in fuel prices to one main cause: high per barrel crude prices. American Petroleum Institute’s Rayola Dougher pointed out that per barrel crude prices moved from $78 in the last months to its current cost of $93 to $94.

However, other factors have also caused to the increasing fuel prices, including a drought that has cut yields of corn and raised ethanol prices, lower capacity due to damage caused by fire in two refineries, on-going tensions in the Middle East and continuous delays on drilling the many domestic deposits in spite of new technologies.

The current administration, in response, points out our country’s unparalleled domestic production level relative to the past. And although it has adopted its “all of the above” strategy toward supplying the energy needs of the country, the administration does not wish to further increase the dependence of the nation on fossil fuels.

Drought has encouraged many, particularly climatologists and environmentalists, to say that climate change is truly happening. James Hansen, a climate activist and NASA scientist recently wrote in his opinion piece for the Washington Post that there is still time to do something and prevent the climate from worsening. However, he said that everyone is wasting significant time and that the problem of climate change can be solvedĀ  by gradually increasing the fee on collected carbon from fossil fuel firms, such as electric utilities.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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