Pain at the pump: 4 reasons why you pay more

10 On Your Side

HAMPTON ROADS, Va. (WAVY) – For months there’s been pain at the gas pumps across America, including here in Hampton Roads.

National gas statistics show the average price of gas is up almost $1.30 over this time last year, and this is the largest 12-month increase in gas since 1990. That spike is hitting some businesses hard, like Pee Wee & Son landscaping in Virginia Beach.

“I was paying $2.09 a year ago, and today it’s $3.29. How can we accommodate with that?” asked owner Wallace Lyles.

“To fill the truck believe it or not was $50, now it’s $100.”

Lyles’ accountant told him this November he’s already spent over $1,000 for gas. Last November gas cost him between $300 and $400.

The price of gas is also impacting drivers like Rayshon Mack, who said skyrocketing gas prices are changing his life. “It does change the way I live, the way I navigate and move. I want to go see my father more, but I can’t.”

10 On Your Side set to find out why the price of gas has been so volatile.

“You have a mix of pandemic, a healthy dose of politics, and a little bit of supply and demand,” said Jeff Miller. He owns and operates Miller Oil Company in Norfolk, the largest family-owned petroleum distribution company in Hampton Roads.


Here are four contributing factors to the gas hike:

REASON 1: COVID-19

“Gasoline volumes dropped by 50% when COVID-19 hit,” Miller said.

The U.S. Bureau of Labor Statistics says the COVID-19 pandemic contributed to large fluctuations in the prices for all refined petroleum products during the first half of 2020. This table shows producer price indexes (PPI) for selected petroleum products and monthly percent changes for January – August 2020:

CategoryJanuary 2020February 2020March 2020April 2020May 2020June 2020July 2020August 2020
Gasoline2.3-6.4-20.2-53.045.037.19.7-2.7
No. 2 diesel fuel-7.2-9.9-12.2-27.2-12.427.331.55.9
Jet fuel4.6-18.9-14.5-48.6-6.851.715.01.5
Source: U.S. Bureau of Labor Statistics

REASON 2: AMERICA LOCKED DOWN

The American Petroleum Institute‘s Frank Macchiarola told 10 On Your Side, “That steep drop in demand was primarily because we were locked down, we weren’t using gasoline, diesel, jet fuel.”

REASON 3: AMERICA IS REOPENING, BUT MARKETS ARE UNCERTAIN

Miller is adamant this is a key issue. “The markets are uncertain about the COVID-19 issues. Lots of questions. Who is producing more? Are they going to produce more? Is COVID going to come back? Maybe we shouldn’t produce more because we got burned the last time, and we had all this oil, and demand dropped and we had to sell at a loss just to get rid of it.”

Sure enough, since that interview was conducted two weeks ago, a new COVID-19 variant “Omicron” is forcing the blocking of flights from several African countries following the discovery of the Omicron variant.

Macchiarola added, “Before the pandemic we were producing 13 million barrels a day. During the pandemic it went down to 11 million. We are slowly making our way up to pre-pandemic production, but demand has roared back. We aren’t ready for that.”

REASON 4: POLITICS AND POLICY IN WASHINGTON

“The message from Washington is we need to move off of oil. We need to restrict federal oil leasing and gas; we need to cancel pipeline projects. All of this has a negative impact on economic activity, and ultimately harms the consumer with increased prices, and people are feeling it at the pump,” Macchiarola said.

Miller added to that, “Government doesn’t want fossil fuels, so we have that working against us. I would say the oil industry is in a state of uncertainty right now, and that is what is creating the volatility.”

At the pumps, 10 On Your Side found stickers like one that read “I did that.” The stickers had a picture of President Joe Biden pointing to the high cost of unleaded gas on the tank.

“I totally agree with that. He did it,” said Linda Shull of Virginia Beach. “It is horrible and unacceptable. It does change the way we travel. Gas costs a lot more.”

Matt Pollard blames price gouging at the pumps and supports President Biden’s call for an investigation, “Yes, we need an investigation; we really do.”

Pollard’s wife, Patty Jaeger, was in the car looking at local rewards through her 7-Eleven app. Patty, like many others, uses the app to consumer shop, finding gas discounts online.

Patty gets local rewards through 7-Eleven Exxon Credit Card. “If you get gas totaling $35 gallons you get 200 bonus points,” she explained.

Similary, gas stations also have partnerships with grocery stores like Kroger and Harris Teeter. The more you buy in those grocery stores, the cheaper your gas is at select gas stations.

To save money, some consumers are changing their driving habits. “We’re not driving to see our families as often, and we aren’t driving to go on vacation as often as we want to,” said Pollard.

Rayshon Mack explained, “We only put in what we can afford. Gas is way too expensive. The last time I filled up my tank with gas was months ago.”

Matt Pollard is felt that same pain as he topped off his tank, “26 dollars for 8 gallons of gas! 26 dollars for 8 gallons of gas! It’s just horrible.”


Additional resources for saving money at the pump:

Find the Lowest Gas Prices on WAVY.com

Dept. of Energy tips on how to save money on gas

AAA gas saving tips

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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