CLEVELAND — Gas at $5.19 a gallon was a sight that caught the eye of motorists along Chester Avenue in Cleveland Tuesday, and that was the cash price if you wanted to pay by credit card, as most do, it was $5.29 a gallon. And if your car takes premium? At $6.29 a gallon, you might want to contact your bank. Harry from Cleveland said he would like to blame somebody but doesn't know who.
"It might be a little bit of everybody,” he said.
The White House would argue Harry's right. Its supply and demand, the war in Ukraine, and the global boycott of Russian oil have reduced global supply, along with the post-pandemic increase in demand especially now from China and the failure of OPEC and American oil production to increase to meet that need are all contributing factors hitting not just Harry in Cleveland but the world.
"So if you were living today in Germany you'd be paying over $8 a gallon for gasoline or a gallon equivalent,” Secretary of Energy Jennifer Granholm told News 5. “You'd be paying over $8.90 if you lived in Singapore. It's happening all over the world."
According to GasBuddy, a year ago gas was about $2.85 a gallon in Cleveland and was around $3.35 in February when the Russian invasion began. That's about a 17.5% increase. While the price jump from the start of the war $3.35 to $5 is a roughly 50% spike. But while gasoline is tied to the price of oil, oil has only gone up only about 25% since February, half of what gas has. That points to a refinery issue here at home.
“We have fewer refineries than we did three years ago,” said Patrick De Haan, Gas Buddy’s Head of Petroleum Analysis. “And that's meant that even with lower demand because of high price it's been hard for refineries to keep up with demand and that's why inventories are at seasonally record low levels.”
The White House is currently releasing a million barrels of oil a day from the Strategic Petroleum Reserves through September and has received assurances from U.S. oil and gas producers to increase production by about a million barrels a day by the end of the year.
"But if I'm honest it's going to be tough between now and then because of that supply and demand mismatch,” Granholm said.
