Consumers may incur an extra $2,000 in fuel costs this year, and fuel prices could still be headed higher.
Gas prices are almost daily, causing financial pain at the pump for millions of Americans. But it’s also spurring questions about why fuel is so expensive — and who’s to blame. Consumers are also wondering when they might see some relief. Not surprisingly, soaring gas prices are having a very real impact on household budgets: A typical family may incur simply due to the higher costs, according to one Wall Street estimate. On Thursday, gas prices again reached a new peak, an average of $4.31 a gallon, according to AAA. Prior to this week, the previous record was $4.10 a gallon in 2008, just before the financial crisis. Suddenly, fuel prices are a major topic of discussion, with families budgeting for higher gas costs and cutting spending in other areas. Some Americans are already driving less due to the higher prices. One in three adults say they reduced their car usage last month, with most blaming gas-pump sticker shock, according to Morning Consult. So how did we get here? Today’s stratospheric gas prices have their root in the pandemic, with Russia’s war on pushing prices higher in recent weeks, said Patrick De Haan, GasBuddy’s head of petroleum analysis. “The overall aspect is that supply and demand have changed,” he told CBS MoneyWatch. “Everything was upended by COVID. If it hadn’t happened, we would have been in a different situation.” Here are three reasons why gas prices are spiking — and when experts think they might come down. When the pandemic first hit the U.S. in March 2020, demand for gasoline plummeted as Americans sheltered at home due to nationwide lockdowns. The typical driver cut their driving in half, according to AAA. That sharp decline in demand caused gas prices to plunge to an average of $1.
