Are High Gas Prices Here to Stay?

Prices for gasoline in the United States have reached all-time highs in the past few months. During the COVID-19 pandemic, the cost of energy was extremely cheap due to the lack of traveling in the spring of 2020. Demand for petroleum products plummeted in 2020 as the pandemic shut economies worldwide, prompting companies to stop production. As the world reopened, the demand for energy increased. However, the supply of energy has not kept up with this demand. This has greatly impacted the gas prices across the United States. Typically during this time of year, gas prices decrease due to less traveling because of the cooler temperatures. However, this has not been the case this year.

Gas demand is growing rapidly as countries attempt to shift away from coal and oil to using cleaner energies. Natural gas is desired because it is less polluting than other traditional fuels. United States oil production companies are avoiding supplying the current demand because they are worried about over-supplying the market like they had done before.

The price of gas in Massachusetts has been climbing since late 2014. These high prices are greatly impacting rideshare drivers post-quarantine. Gas prices are going up, but the pay for rideshare drivers is remaining constant. In September 2021, the average price of a gallon of gas in Massachusetts was $3.16 - the highest it has been in seven years, since October 2014. Since then, the average price of gas has reached $3.36. Gas prices are expected to continue increasing as countries continue to open back up around the world. Crude oil currently trades for $85, a $16 increase since August 2021. Countries that produce oil have not increased production in response, therefore the current supply of oil is not satisfying the demand. This has been a great struggle for rideshare drivers since the return to work post-quarantine.

Another example is in San Francisco, California, the average prices for gasoline reached an all-time high of $4.75, breaking its previous record of $4.73 in 2012. In Mono County, California, the average price of gas has surpassed $5.

It is expected that gas prices will continue to rise for a while before finally falling. This may partially be due to the lower temperatures to come.