US retail gasoline and diesel prices rallied to a record just ahead of the nation’s summer driving season, a challenge for President Joe Biden and the Federal Reserve as it combats the fastest inflation in decades.
Average gasoline prices hit US$4.374 a gallon, according to the American Automobile Association. Diesel also hit a record at US$5.50. The surge is set to add to inflationary pressures gripping the world’s biggest economy. The U.S. summer driving season starts in about three weeks.
Oil surged this year as the Russia invasion upended commodity markets, jeopardising the supply of fuels globally just as demand in most economies rebounds from the impact of the pandemic. That’s pushing up the prices of everything from motor fuel to food despite the Biden administration’s efforts to push back, including a giant release of crude from strategic reserves.
Fuel consumption is being monitored closely, with Americans expected to drive more this summer than in 2021 even as pricier gasoline limits some travel. The nation’s motorists are expected to use 9.2 million barrels of gasoline a day from April to September, up by 0.8% from the same period last year, the Energy Information Administration’s summer outlook showed last month.