US gas prices continue to rise and break records. On May 23, the national average for a liter of petrol cost $4,596. In California, the average gas price has surpassed $6 per gallon for the first time and is currently at $6,069.
Gas prices continue to break records – $6+ in California
Record high gas prices are causing financial pain for small businesses, some of which are still recovering from the disruption of the pandemic and labor shortages.
With regional differences in costs — with California being the only state to have crossed the $6 per gallon mark — it’s important for small businesses to be aware of regional fluctuations and where to sell the cheapest gas so they can realize valuable savings.
Supply and demand
Prices at the pump are being pushed up by tighter supply and higher demand. Data from the Energy Information Administration (EIA) shows that total domestic gasoline inventories fell by 4.8 million bbl to 220.2 million bbl. At the same time, the demand for gasoline increased from 8.7 million b/d to 9 million b/d.
This combination of low supply and high demand, with volatile crude oil prices, is likely to continue to push prices up at the pump.
According to AAA figures, drivers in California have to pay an average of $6,069 for a gallon of fuel, more than anywhere else in the country. This is a record high for California and the US.
Andrew Gross, a spokesperson for AAA, spoke about the rising cost of gas.
“The high cost of oil, the main ingredient in gasoline, is driving these high pump prices for consumers. Even the annual seasonal drop in gasoline demand during the break between spring break and Memorial Day, which would normally help lower prices, is having no effect this year.”
The national average is around $4,595 per gallon, another record high.
Most expensive states for gasoline
After California, Hawaii is the most expensive state for gas, where fuel costs an average of $5,380. Nevada and Washington are among the highest for gas prices, averaging $5,245 and $5,207 per gallon, respectively. Alaska has also seen prices rise to an average of $5,194 per gallon.
Least Expensive States for Gasoline
Oklahoma is the cheapest state for gasoline, where the cost per gallon averages $4,037 as of May 23. This is followed by Kansas, where prices are $4,046, and then Arkansas, where drivers are charged an average of $4,115 per gallon at the pump.
Fuel costs have a direct impact on small business overheads, and rising costs can affect a company’s cash flow and the pricing of their products or services.
With costs rising above $6 in California and hitting record averages in the US, rising gas costs are especially hurting small businesses where transporting goods or providing services is critical to day-to-day operations.
The more heavily a small business relies on gasoline, the more important it is to stay on top of the cost of gas and where the cheapest prices are offered at the pump.
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Image: Small Business Trends