From staff and wire reports
WASHINGTON – Gas prices surged to a new high Tuesday despite efforts by President Joe Biden to stabilize them.
The average price for a gallon of gas nationwide hit $4.37, the highest price AAA has recorded since it started keeping track in 2000. The average price of a gallon of regular-unleaded gasoline was $4.87 in Washington, $4.60 in Spokane and $4.39 in Coeur d’Alene.
Diesel prices were even higher. The average price for a gallon of diesel was $5.71 in Washington, $5.52 in Spokane and $5.33 in Coeur d’Alene.
However, the fuel prices are not the most expensive on record, when adjusted for inflation. But the prices continue to increase even after Biden ordered a million barrels per day released from the Strategic Petroleum Reserve a little more than a month ago.
“I know families all across America are hurting because of inflation,” Biden said Tuesday in a speech at the White House complex. “I want every American to know that I am taking inflation very seriously.”
While the fuel prices hit consumers directly as they pump fuel into their vehicles, they also add to prices at stores, which rely on trucking companies to deliver virtually everything they sell, said Steve Hanning, owner of Mercer Trucking Co. in Spokane Valley.
“It’s a shock. I have no idea where it’s going,” said Hanning, who remembers thinking that diesel would never reach $5 a gallon. “In order to get you groceries at the grocery store … we have to raise our prices or we are done. If we are done, you don’t eat.”
Mercer, who has spent 47 years with the company – including 12 as a truck driver – said shipping and trucking companies have to raise their rates as fuel prices go up. As a result, consumers then pay higher prices for everything from food to lumber to tires.
“Everything you see, on both sides of you, has been on a truck probably three or four times,” he said. “Trucking will always be essential. When we go to the fuel pump, we are all paying the same price. As prices go up, so do my rates.”
In response to rising fuel costs, Biden outlined his latest plan to reduce the price pressures throughout the economy that have badly damaged his popularity.
“My plan is to lower everyday costs for hard-working Americans and lower the deficit by asking corporations and the wealthiest Americans not engage in price gouging and pay their fair share,” Biden said. He accused the GOP of pursuing an agenda that would instead raise taxes on working class voters.
Nowhere is the pain more obvious than at the gas station. Tuesday’s prices are below what consumers were paying at the high-water mark in July 2008, when gas was $5.36 per gallon in today’s dollars, but the sting for consumers remains.
“The tools the federal government can use to influence prices are limited,” said Devin Gladden, manager for federal affairs at AAA National. “They are already using almost the whole toolbox.”
This month’s increase, Gladden said, is largely a response to the European Union’s announcement that, with a few exceptions, it aims to stop all imports of Russian oil by the end of the year in response to the invasion of Ukraine.
The European move has a much bigger impact on world markets than any short-term measures the Biden administration can take to blunt rising gas prices.
Analysts warn it could be a long time before prices come down significantly. At the very least, it is likely to be a long, challenging summer for drivers.
“No one has any idea how long this war will last or how long and deep its global energy impact will be,” said Edward Chow, an energy security scholar at the Center for Strategic and International Studies who previously worked in the oil industry for decades.
He said the reshuffling of the global oil export map could leave the United States facing the kind of prolonged, soaring prices it endured during the OPEC embargo of the early 1970s and the Iranian revolution that followed in that decade.
“It may well be bigger and longer lasting,” he said. “You simply cannot take the country that was the world’s largest combined exporter of oil and gas off the board without major impact.”
Compounding the challenge for the United States is a pandemic during which demand dropped so low early on that at one point oil was trading for zero dollars a barrel. That, combined with market uncertainty as the United States and Europe race to transition from fossil fuels, gave oil companies little incentive to invest in costly new drilling infrastructure. Those kinds of things don’t ramp back up in days or weeks.
It is not just a matter of getting more crude oil flowing. The United States’ ability to refine oil has diminished as older, dirtier, less efficient facilities have been replaced with updated refining equipment, said Kevin Book, managing director at ClearView Energy partners, a research firm. The nation’s refining capacity, he said, is considerably less than it was at its peak.
“It takes years to build new refineries, and years to expand existing ones,” Book said. “We will see more capacity in the world. Just not right here, right now.”
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