Gas prices have continued to drop in Connecticut and across the country this week, including here at the CITGO Atlantis Fresh Market station on Main Street in Rocky Hill. The price of $3.49 per gallon for regular gas was the lowest price offered in Connecticut on Wednesday, August 17, 2022, according to user-reported prices on the GasBuddy mobile app. Credit: Doug Hardy/CTNewsJunkie
Gasoline prices continued their downward slide this week as the crude oil market stabilized and gasoline demand, according to a survey conducted by AAA – stayed low. The average price per gallon of regular gasoline in Connecticut was $4.09 on Wednesday, down 8 cents from the previous week and 89 cents from its June 14 high of $4.98.
The national average also continued its slide, according to AAA, falling 10 cents over the past week to $3.94 on Wednesday, down from its June 14 high of $5.01. Wednesday’s national average was 59 cents lower than a month ago, but was still 76 cents higher than a year ago. Connecticut’s average Wednesday was 91 cents higher than a year ago, but the state’s 25-cent-per-gallon tax is currently suspended to help consumers.
The statewide average dropped 42 cents over the past month, AAA reported.
Gasoline demand had remained high for several months despite rising prices, an aberration that AAA economists attributed to pent-up travel demand after two summers of pandemic conditions. But over time, apparently, motorists began to see their mileage, which led to a steady trend of declining prices.
“Falling pump prices may get more drivers back on the road,” said AAA spokesman Andrew Gross. “But that hasn’t happened yet. Instead, many drivers are waiting for prices to drop further before returning to their normal driving habits.”
The AAA survey found that nearly two-thirds of American adults had changed their driving habits since March, with less driving and combining errands as the top two changes surveyed.
The Energy Information Administration (EIA) reported that gas demand rose from 8.54 million barrels a day to 9.12 million last week, but that rate is 307,000 barrels a day lower than last year.
The lowest price for a gallon of regular gas reported Wednesday in Connecticut by users on the free GasBuddy app was $3.49. This price was available at three Rocky Hill locations, including:
CITGO & Atlantis Fresh Market at 2720 Main St.Gulf at 2757 Main St. and; RoadRunners at 2204 Silas Deane Highway.
Connecticut average price per gallon of regular gasoline by county on August 17, 2022. Credit: Composite screenshot / AAA / CTNewsJunkie
How did we get here?
Crude oil prices rose after the Russian invasion of Ukraine on February 24. crude oil WTI was $92.81 a barrel on February 24, according to various tracking services, but had risen to $123.70 on March 8 before a bumpy but generally downward trip to $99.76 on May 10
Then on May 10, with the Russian invasion still underway, the European Union announced that it would ban Russian oil exports for the next six months. Russia provides about 10% of the world’s crude oilso the EU announcement pushed the price of crude oil higher again, reaching a high of $122.11 on June 8.
During that period, gasoline prices rose around the world, including a new record average price per gallon here in the US of $5.016 on June 14. Connecticut’s average for the same date was also the highest ever at $4,984.
The price it has since fallen below $90 a barrelclosing around $88 on Wednesday, August 17 and demand for gasoline in the US has been decliningaccelerating the drop in gas prices.
A conflicting poll and Biden makes strides
According to The HillPresident Joe Biden faced mixed public opinion data in March on gas prices and the Russian invasion.
There was widespread approval for a ban on Russian crude oil imports, according to one ABC News/Ipsos survey, though Biden warned it could exacerbate energy costs here in the US. But the same poll showed 70 percent of respondents disapproved of Biden’s handling of gas prices.
While experts say most of the factors influencing gas prices are not within the White House’s control authority, Biden took five specific steps over the next few months to ease gas prices. The Hill and other news organizations reported the following:
Over a period of several months, Biden ordered the release of a total of 180 million barrels of crude oil from the Strategic Patroleum Reserve; in April, Biden ordered the removal of restrictions on the sale of E15, which is a fuel that is 15% ethanol, between June and September of this year to increase supply; Biden called on OPEC members to increase production and exports to meet global demand, but current relations with Saudi Arabia in particular are strained due to the kingdom’s human rights violations, as as well as the widely reported murder of Saudi dissident journalist Jamal Khashoggi, who wrote for the Washington Post; Biden pressed US oil companies to start using some 9,000 approved drilling permits and called on Congress to legislate a “use it or lose it” policy. impose fees on companies that do not drill on land they have leased for that purpose, and the president continued to promote the country’s transition to renewable energy.
Why do we import crude oil?
Financial analysts like Martin Tillier, who is a contributor to Nasdaq.com, have been talking about the problem that often comes up when gas prices rise: If the US is the world’s largest producer of crude oil, why should we continue to depend from abroad oil?
In a piece dated March 8, 2022, just as oil prices peaked, Tillier explained the difference between crude oil extracted from most domestic oil fields in the US and that extracted in the Middle East and Russia. – Basically, US crude is lighter and “sweeter” and therefore harder and more expensive to refine.
The problem is that for many years, imported oil met most of the US’s energy needs, so a large percentage of the refining capacity here is geared towards dealing with oil that is heavier and less sweet than what occurs here.
A coordinated and forward-looking energy policy over the past decades would have addressed this issue through subsidies and incentives. That money has been paid anyway: it wouldn’t have been hard to use it to make America truly energy independent. However, it seems politicians would prefer to maintain a situation where periodic energy crises give them a club with which to beat an incumbent. Lest you think I’m making a partisan point, the current criticism is of a Democrat by Republicans, but the last time the crude was at these levels it was Democrats criticizing George W. Bush, a Republican, for policies and actions they said forced oil. higher then. Martin Tillier for Nasdq.com