PENNSYLVANIA — As the heatwave scorches much of the United States, gas prices seem relativly steady, albeit at an eight-month high. This may be due to Americans reducing their driving habits to seek refuge in cooler places indoors. But the overall picture is more complex than that, as demand for gas fluctuates wildly depending on where you are. Meanwhile, global factors such as refinery issues and OPEC production cuts are adding to the mix, raising the specter of further price hikes and inflation.
In Pennsylvania, gas prices have risen to $3.83 a gallon, a week-on-week rise of 3.5%, according to Stacker data. The year-on-year change is a decrease of 14.9%. The historical high for expensive gas in Pennsylvania was $5.07 in June 2022, though whether we’ll see such heights again remains to be seen. Diesel prices are also rising, with the current price at $4.32, a 1.2% increase in the last week. The year-on-year change is a decrease of 23.9%. The most expensive metros for gas in Pennsylvania are Erie, York, Altoona, Johnstown, Lancaster, and Philadelphia, with prices hovering around $3.85 to $3.87.
Nationwide, demand for gas has remained relatively flat in the last few weeks, according to AAA. However, this masks a tale of two different types of demand in areas with and without heat waves. In cooler areas, demand remains high, as people take advantage of their newfound mobility after lockdowns. However, in hotter areas, such as the Southwest, demand has dropped significantly as people stay indoors to avoid the heat. This has had the effect of keeping pricing stable for the time being.
However, beyond local factors, global issues are also at play. A recent Bloomberg report highlighted that problems at refineries have caused low levels of stored gas and contributed to surging prices worldwide. In addition, nations within OPEC are expected to cut oil production in August, which could push prices even higher. This could have knock-on effects for industries that rely heavily on oil production, such as airlines and trucking, as well as ordinary consumers.
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