Gas prices have reached peaks never seen before, but that’s not the case for oil.
The record high gas price was reached in the U.S. with a national average of $4.43 per gallon. The average price of a gallon of gas in San Diego County is $5.76.
Gas prices have many factors with the primary factor being the cost of oil. The price of crude oil has surged since Russia invaded Ukraine.
“Oil prices have increased over the last year from mainly $60 a barrel all the way up to about $93 prior to the Ukraine invasion. Then when the Ukraine invasion hit, they spiked to about $130 because of the risk of we didn't know what this oil was going to get on the market they have subsequently come down to about $103 right now, as we're speaking,” University of Southern California Professor Shon Hiatt said.
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The recent spike in the price of oil is not a record high.
The record high was set in June 2008 when oil topped over $140 per barrel.
Although the 2022 high in crude oil prices never hit the record set in 2008, gas prices have surpassed what was seen in 2008.
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“One of the reasons is the taxes are higher than they were back in 2008. So, the price of fuel that you see at the retail, there is not just the price of oil, which is the foundation, but also includes the additional tax. There's also additional regulations that have occurred since then, like in California, we now have a carbon trading tax. You can also call that a tax, which is also built on that, so the Refiners now have to pay and purchase carbon credits, so these credits have gone into that price of fuel,” Hiatt said.
Inflation also factors into the rise in the price of commodities.
“Inflation factors in I mean that was the major driver of the commodity rush that occurred up to 2007, We had about 5-6% inflation running at that time. Right now, we have 8% inflation. This is one of the reasons we're seeing these large commodity price increases,” Hiatt told NBC 7.
The price of crude oil has dipped since the 2022 high that was reached in early March 2022.
Gas prices are expected to drop eventually, but a significant drop isn’t expected soon.
“I think we might see our prices dip next week it could go down based on the lag from the price that jumped and dropped from $130 to $100. So, we might see a few cents go down but getting down to say $4 a gallon which we had a year ago or even below four," Hiatt said. "I don't see that happening this entire year because of the current supply and demand issues in the marketplace."
