The average price for a gallon of regular unleaded gasoline in the Sacramento area is now $5.48, up from $4.82 a week ago. Russia's invasion of Ukraine has contributed to record prices across the country.
This week President Joe Biden announced a ban on Russian oil and gas, calling it a critical step to punishing Russian President Vladimir Putin.
"Defending freedom is going to cost. It's going to cost us as well in the United States," Biden said.
Patrick DeHaan with the price tracking firm GasBuddy said that prices had been increasing before the invasion, driven by the disruptions COVID-19 placed in the industry, but what happens next is tied to the situation in Ukraine.
"There are some stations in Sacramento already above $6; four stations at that level," said Patrick De Haan with the price tracking firm GasBuddy. "But I think things could be calming down for now. Obviously, if Putin or the situation changes significantly, that could ultimately make prices go back up."
DeHaan spoke with CapRadio's Steve Milne about what Sacramento drivers can expect over the coming weeks and how we got to this point.
This interview has been edited for clarity and length.
On the latest prices in the Sacramento region
Prices have just absolutely been furiously climbing. In Sacramento, the latest price now is about $5.48 a gallon. That is up from $4.82 a week ago, up from $3.69 a year ago—just an absolutely impressive jump.
The good news is that the pace of increases may start to slow here in the days ahead. Obviously, if Putin or the situation changes significantly, that could ultimately make prices go back up. But oil prices [are] actually down slightly at $6 a barrel. And while that won't alleviate or bring lower prices yet, that will likely eat into stations having to further raise much more beyond where we are today. So finally, maybe a little light at the end of the tunnel.
On how Sacramento compares to the nation and the state
Well, compared to the national average, Sacramento is about $1.20 more. The national average is $4.28 a gallon. Sacramento is also about 10 cents lower than the statewide average of $5.58 a gallon. So a little bit better off, but still, it's hard to find lower prices in Sacramento. There still are stations under five dollars, but not a whole lot of them.
On why California prices are higher than the rest of the county
Well, state gasoline taxes are very high in California. California also has its own special blend of gasoline that costs more. In addition, the cap and trade program, or carbon management program, essentially levies an emissions tax on motorists across California. And all of that really adds up to about $1.20 a gallon.
On how we got here
This is not an all of a sudden increase. Prices were high before this, and a lot of that has to do with the fact that COVID hit and greatly changed oil production. Of course, motorists early in the pandemic stopped driving, which caused oil companies to rethink how much oil they were producing, and they cut it because oil prices had plummeted. Now, oil prices have surged, and they can't increase production fast enough to keep up with that. And that's a lot of the reason why we are where we are today.
On when he thinks prices will start dropping
I think that's really a function of when the situation in Russia will start cooling off or when Putin will, you know, go the other way —when things could de-escalate instead of escalating. And it's really hard to know when that might happen.
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