Will Gas Prices Go Down?

Gas Prices Expected to Fall After a Summer Spike

Gas Prices are out of control at the gas pumps. Photo by Harrison Haines
Gas prices topped  $4.60 at the end of May, putting them more than $1.50 higher than last year. 

Will the madness ever end, or is $5 gas a new normal?

gas pump iconWill Gas Prices Go Down?

Eventually, but probably not until after the summer. Global production has increased month over month since the end of COVID lockdowns. 

Once the summer travel season is over, demand for gas will also decrease, allowing production to catch up with demand finally. 

And several executive orders from the White House should begin to show up at the pump in the coming months. 

Prices Trending Up After COVID Dips

According to AAA (they watch gas prices closer than anyone), the June 6, 2022, average price for gas in the US was $4.86, which is also the all-time high price for gas in the US. Compare that to $4.61 a week ago, $4.27 a month ago, and $3.05 a year ago. 

Triple-A gas price graph. Courtesy of AAA

What’s Causing the Hike?

Pandemic: When we were all locked in our houses during 2020, we quit buying gas. That means oil companies had to reduce oil production to keep their costs down. Plus, lockdown orders mean drilling sites and refineries were already operating at a significantly reduced capacity. Production is only just now returning to pre-pandemic levels.

Texas Production Shortages: According to Newsweek, several disruptions in gulf coast oil refineries drew down US gasoline inventories, causing even higher demand. 

During the month of the deep freeze in Texas, crude oil production dropped by nearly four million barrels per day

War in Ukraine: The Russian invasion of Ukraine has contributed to the increase in fuel costs. War requires a great deal of gasoline, increasing global demand. Plus, the refineries and wells in war-affected areas cannot produce as much. Finally, sanctions against oil-producing countries cause dips in global availability. 

How Do We Fix It?

The White House: President Biden announced a number of initiatives to increase supply, reduce demand, and lower prices at the pump, including:

  • A fee is charged to any company with an oil lease on federal lands that isn’t actively drilling 
  • Coordination with congress to incentivize a switch to electric energy
  • Use of the Defense Production Act to speed the extraction and production of minerals and materials used in electric vehicle batteries. 

Pandemic: As long as we can avoid upticks in COVID cases, production should continue to increase. And as more people move to electric vehicles and the travel season comes to an end, demand will continue to decrease. 

Is Now the Time to Go Electric?

Eclectic vehicles are definitively less expensive to drive, charge, and maintain than combustion-engine vehicles. And they’re more affordable than ever. There isn’t an abundance of economy options yet, but the entry price to EV ownership has ticked down year over year. 

Additionally, newer and popular used car models are selling on the Carmigo marketplace at and above new-car prices. That means you may be able to swap out your current wheels with a much less expensive electric vehicle. 

If you snag a qualifying model, you can earn up to $7,500 in tax credits on your 2023 tax return.

If you’re ready to make the switch, Carmigo can sell your car faster and for more money. Seriously. List within a day. Sell within a day. Carmigo is easier. Please read our reviews for proof.