Pain at the Pump in Americaland: Petrol Hits USD4 Per Gallon in All 50 States. First Time Ever!

All is doom and Automologist MAC thinks it will get gloomier…

To put that number into perspective, that is about USD1.06 per litre. But if you live in sunny California, you can expect to pay over USD6.02 per gallon or about USD1.59 per litre.

For America, this is a record. Never before has the price of petrol been higher than USD4 per gallon for the whole country. However, I am sure that this is not a record that Uncle Joe Biden will be happy about even if it could be said that it is much of his making.

Over the past month, the national average according to the Automobile Association of America (AAA) has increased by 44 cents to hit USD4.52 per gallon. In the course of the past year, prices have risen on average by as much as USD1.52, enough to bring tears to your eyes.

The worst may not be over yet, with the AAA advising that they expect the cost to continue to spiral largely due to the incredibly high cost of crude oil, which is still slowly but surely rising. The US did release tens of millions of barrels from their strategic reserves, but that seems to have very little impact on the prices.

How did America, which is one of the largest producers of oil in the world, come to this? In fact, in 2022, the US produced more oil than anyone else and when you consider Canada was the fourth-largest, it does seem crazy that there should be a ‘shortage’ in the US.

In actual fact, there is no shortage, although there is reduced supply. This has very little to do with Russia’s Spring Tour of Ukraine, considering that since the embargo on Russian oil, they have actually been exporting more of it rather than less. In reality, the cause is very much to do with the reversal of Trump-era policies by Biden, like the Keystone Pipeline which created nervousness in the market. You may not have liked Trump but under him, America became energy independent for the first time in a long time. Another cause has been OPEC’s refusal to turn the pumps back on after demand rose again in our post-Covid world.

And I fear the worst is yet to come.