Gasoline prices at the pump reach all-time highs
The price of gasoline at the pump has reached an all-time high and surpassed the average price of $5 per gallon of premium gasoline in the United States, according to data from the American Automobile Association (AAA).
This price is driving inflation and is bad news for Joe Biden just months before a crucial election.
The price of 5 USD per gallon of gasoline is crazy because it has increased by 62% in 12 months. The current price corresponds to 1.25 euro per liter, as Americans are used to gasoline that is less taxed and less expensive than in Europe.
This is very bad news for inflation and this increase follows the rise in oil prices, which had collapsed at the beginning of the pandemic due to lack of demand but recovered as economic activity recovered. They jumped especially after the tensions between Ukraine and Russia at the end of February and the introduction of sanctions against Russia, a major producer of black gold. A barrel of crude oil is currently trading at more than 120 USD in London and New York.
According to figures released on Friday 10 June by the US administration, energy prices as a whole soared by 34.6% in May compared to May 2021.
This price spike helped fuel the overall increase in U.S. consumer prices, which rose 8.6% year-over-year in May, a 40-year high.
This is very bad news for American households as the vacation season approaches and Americans often opt for more fuel-efficient cars. Higher prices at the pump will put a further strain on the budgets of motorists, who must also cope with rising prices for food (+10.1% in May), housing, cars and medical care.
Joe Biden has to worry about controlling inflation, he has been repeating for several months that his administration is doing everything possible to lower prices without slowing down economic activity and must face in a few months the mid-term elections, which will renew a large part of the elected members of Congress.
Joe Biden is very angry with the American oil industry, and he warned against “using” the situation in Ukraine “to make things worse for families, make excessive profits or raise prices”.