We haven't seen gas prices this high in the US since 2008, with Russia's invasion of Ukraine being a primary driver. AAA reports that the average cost of a gallon of gas was $4.17 as of Tuesday morning, per CNN Business. That's a 10-cents-per-gallon increase just from Monday, according to the Oil Price Information Service. So how high can we expect this to go? Citing a forecast by GasBuddy, USA Today reports that the national average for a gallon of gas will peak in May at $4.25. But the average is expected to stay at over $4 until November, and the unpredictability of the war in Ukraine remains in the mix. "I think we'll hit $4.50 a gallon before it turns around," Tom Kloza, OPIS' global head of energy analysis, tells CNN. "Even $5 a gallon nationwide is possible. I wouldn't have predicted that before the fighting started." More on the issue:
- Where are gas prices highest? California has the dubious honor of boasting an average $5.34 a gallon, the only state whose average tops $5. As of Monday, 21 states saw averages of more than $4 a gallon, including all Pacific and Northeast states, and most mid-Atlantic ones, per USA Today.
- Where are they cheapest? Top off your tank in Missouri, Kansas, Oklahoma, and Arizona, which are all currently hovering under $3.70.
- Not ending soon: An analyst for GasBuddy says that consumers should expect the "dire situation" to stretch out for a while, noting, "The high prices are likely to stick around for not days or weeks, like they did in 2008, but months."
- Annual effect on your wallet: What this all translates to for the average American household is about $2,000 more a year in gas costs, according to Yardeni Research numbers cited by CBS News. Add that to the $1,000 or so tacked on for higher prices at the supermarket, and that's about $3,000 per year extra that a US family will need to come up with.
- Bigger picture: Still, gas only makes up a relatively small portion of most consumers' overall spending; the most extreme prices across the US will likely start to fall as domestic shale oil fields increase their production; and many consumers will be able to shift money around to compensate. "The long-term impact should be somewhat minimal," Michael Feroli, chief US economist at JP Morgan, tells the New York Times.
- 'Hyper-supply crunch': That's how one analyst for energy supply firm Rystad Energy frames the current oil situation for the Wall Street Journal. In addition to traders, shippers, and financial institutions turning their backs on Russian oil, gas prices also typically rise as the weather warms and people start to travel. COVID restrictions are also lifting, meaning even more people than usual may be out and about, increasing demand.
- Trucking along: Hit especially hard as gas prices continue to rise will be those whose vehicles are integral to their paycheck, such as long-haul truckers, per CBS Miami. The CEO of one Florida trucking company says his trucks typically hold up to 300 gallons of gas—so if a pump is selling gas for $5 a gallon, that's a $1,500 fill-up.
- Ride-share/ride-hailing providers: Meanwhile, app-based drivers, such as those who work for Uber, Lyft, or DoorDash, are wondering if it's even worth it to clock in. "Everything I'm making, it's just going to my gas tank," one DoorDash driver tells USA Today, noting that about 70% of his earnings have been invested back into the pump.
- Vacation plans: The good news is that airlines typically set their fares months in advance, so consumers buying tickets now likely won't see a price surge, flight experts tell WPVI. The bad news: That surge will eventually hit. "If current oil prices are sustained, I expect folks purchasing tickets in June, July, August to really see that show up in their bottom line," a Scott's Cheap Flights analyst notes.
(Read more gas prices