If you’ve filled up your vehicle lately, you know that gas prices are steadily rising. As of this writing, the average price of a gallon of unleaded regular gas in the United States is $3.15, according to AAA.
In this article, money expert Clark Howard is going to answer in detail one of the questions vehicle owners are grappling with this summer: Why is the price of gas continuing to go up?
Why Are Gas Prices Rising?
Historically, gas prices ebb and flow based on the price of a barrel of oil on the world market. In a normal cycle, you might be able to predict certain price patterns. But Clark says what’s going on now is sort of an anomaly. “It is kind of crazy how much it’s gone up,” he says.
Usually when we hit the week after the Fourth of July, that’s usually the peak for gasoline prices for the year — that’s usual,” he says. “This is not going to be usual.”
“In fact, we may see over the next few weeks that prices continue to rise at the pump because of these much higher prices for a barrel of oil,” he adds.
Understanding what’s going on right now requires a brief explanation of the decision-makers that determine the price of crude oil across the world: OPEC (Organization of the Petroleum Exporting Countries).
Who Controls Gas Prices?
OPEC is an intergovernmental cartel with 13 member countries. It states its mission “is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”
The origins of gas hikes going on right now can be traced to the height of the COVID-19 pandemic in 2020, “when demand fell off a cliff,” Clark says. That’s when the price-fixing cartel enacted tight restrictions on oil production that most its member nations have followed.
“What that’s going to mean in the immediate future is pain at the pump for your summer driving. That’s not going away,” he says.
“They’ve been trying to manufacture a shortage to pump the price up by pumping less oil out of the ground. And so far, they’ve been successful,” Clark says. “But I can tell you this: Moving forward, they’re going to fail!”
When Will Gas Prices Go Down?
What tends to always happen is that when the price per barrel rises, OPEC producers “start cheating on their quotas.,” Clark says. “And there will be magical additional barrels of oil that will be produced and deal with the supply issues that have pushed the price up.”
Clark estimates that we will see some relief at the pump by September or October.
Here’s how the next several months are expected to pan out: “So we have pricing pain for the next couple of months … then we’ll start to see supply increase and the effect of that is that it will start to bring prices back down,” he says.
Clark says there are two additional factors that should help stem the rising price of gas:
- In the fall, demand for gas tends to decline in the Northern Hemisphere.
- The additional oil that is expected to be produced should by that time affect prices at the pump. Then, “we will see prices start to come back to Earth some,” he says.
How To Save on Gas This Summer
In the meantime, here are some things you can do that will help lessen the blow of high gas prices.
1. Don’t Skip Your Car’s Routine Maintenance
Adhering to a maintenance schedule can save you money.
For example, keeping your tires properly inflated can increase your fuel economy. According to the U.S. Department of Energy, that can save you about a penny a gallon.
2. Buy Gas With a Rewards Credit Card
Clark’s wallet is full of credit cards that benefit him for what he purchases. One way to take advantage of this is to use a credit card that gives cash back on gas purchases.
3. Economize Your Trips
If you have errands to run, organize your trips so that you can make multiple stops along a particular route or journey. That way, you’ll save money by not using so much gas.
Want to know even more ways to be fuel efficient? Here are 20+ ways to save on gas.