The average price of a gallon of gasoline nationwide has hit $2.82, up from $2.34 a year ago. As the United States pulls out of nuclear proliferation treaty with Iran, oil prices likely will rise, and perhaps rapidly.
American gas prices will consequently go higher, and they are already above $3 in nine states. Another five are less than a dime lower than that.
The states with gas prices over $3 are topped by California at $3.64. It has 12% of the nation’s population. Next are Hawaii at $3.63, Washington at $3.31, Alaska at $3.26, Nevada at $3.25, Oregon at $3.23, Utah at $3.13, Idaho at $3.12 and Pennsylvania at $3.01.
State gas taxes in Pennsylvania add more than 77 cents to the price of gasoline, and California state gas taxes add more than 74 cents to the pump price. The national average is just over 52 cents, of which 18.4 cents is federal tax.
Crude oil closed down following the announcement Tuesday that the United States was leaving the Iran nuclear deal, but prices jumped about 2.5% in electronic trading Wednesday to more than $71 a barrel for West Texas Intermediate (WTI) crude. That’s the highest price for crude oil since late 2014.
Venezuela, once a producer of nearly 2.5 million barrels of oil every day, has dropped to a production level of around a million barrels a day, well below its agreed quota to meet the OPEC production cutbacks that have been in force since January of 2017. The country’s May 20 elections are virtually certain to result in the re-election of President Nicolas Maduro and, almost equally certainly, the imposition by the Trump administration of further sanctions on the country. The likely result is another increase in crude oil prices.
On Tuesday, the U.S. Energy Information Administration estimated that pump prices would average $2.97 for the month of June and $2.90 for the entire 2018 summer driving season running from April through September. For the full year, the EIA expects the average price of a gallon of gasoline to be $2.79.