As Memorial Day weekend approaches, gas prices will likely hinder many people’s holiday plans. While Oregonians aren’t paying the highest prices in the nation, the state is one of only five where the average price of regular unleaded fuel is over $5 per gallon, which is $0.56 over the national average.
AAA is expecting an 8.1% increase in travel in the Pacific Northwest compared to this time last year, with more than 530,000 Oregonians planning some kind of trip over the long weekend. While air travel is beginning to see a rebound, AAA says that 89% of holiday travelers will be on the road and using roughly 9 billion barrels of fuel per day, which is closer to the pre-pandemic average for the season.
While there are multiple factors behind the rise and fall of gas prices, the US Energy Information Administration says 53% of each gallon of fuel is the actual price of crude oil, 12% is the cost of refining it into gasoline, 21% goes to distribution and marketing, and the rest – 15% – is taxes.
Russia is one of the top three oil-producing nations in the world, according to Marie Dodds, Public Affairs Director for AAA Oregon/Idaho. Their sudden departure from world markets is having a direct and immediate impact on prices.
“Gasoline is more than a dollar per gallon higher now than it was on February 24, when Russia invaded Ukraine. That sent shock waves through the global oil market and crude prices have remained significantly elevated ever since,” said Dodds. “Even with record high pump prices, demand for gas is rising as more drivers hit the road, despite the pain they’re feeling at the pumps. Tight global oil supplies made worse by the lack of product coming out of Russia have put upward pressure on crude prices. A year ago, crude was around $66 per barrel compared to $110 today.”
Another factor in prices this Summer will be an annual “switchover” to a more expensive “Summer blend” of gasoline which can add six to seven cents per gallon. According to AAA, this is something the oil and gas industry does each year and is unrelated to government policy.