A year ago, average national gas prices hovered around $3 a gallon. This month, gas stations across the country posted the highest average prices on record.
In some parts of the country, average gasoline prices approached $6.50 a gallon. In the Durham-Chapel Hill area, average gasoline prices hit a record high of $4.68 on June 11.
Zack Johnson, a rising senior from UNC who travels to Raleigh twice a week for his sales internship at Red Hat, said he spends about $150 on gas each month, despite carpooling with another intern.
Johnson added that as a student and intern, spending a significant portion of his budget on his gas has kept him from doing some of the things he wants to do. He says the price isn’t ideal but he can afford it right now.
“At least they’re paying me, so I don’t see that as a big deal,” Johnson said.
President Joe Biden has offered several potential short-term solutions to these high prices, including a three-month federal gasoline tax exemption, which would reduce gasoline prices nationwide by 18 cents per gallon. .
The Biden administration also released 30 million barrels of strategic oil reserves, but supply chain expert and North Carolina state professor Robert Handfield said the extra gasoline in the markets will reduce hardly the supply deficit that America currently faces.
Although an increase in domestic oil production was also suggested, Handfield said oil production could not be increased quickly.
“You don’t do it by snapping your fingers,” he said. “We have to drill, we have to find the oil. A lot of shale drillers in the Midwest, they used a lot of easy-to-access oils, so they have to go after other things, which is harder to find.
The Organization of the Petroleum Exporting Countries is responsible for about 40% of world oil production. OPEC members include Saudi Arabia, Venezuela and Iran – all countries with tenuous relations with the United States.
Handfield said OPEC cut production when oil prices were low at the height of the pandemic in an effort to boost prices and revenues. Since OPEC produces so much of the world’s oil, he said the United States had to rely on OPEC.
“There is no immediate solution,” he said. “The best possible solution is OPEC, which is what the Biden administration is aiming for.”
Handfield said the Biden administration should reconsider its rejection of the controversial Keystone XL pipeline, a pipeline that would have brought oil to the United States from Canada.
The transnational project was abandoned in 2021 due to concerns about its path through Native American lands, potential leaks, and other environmental costs.
“Pipelines are the safest way to transport oil, much safer than railcars or tankers,” Handfield said. “It would allow us to buy oil from a friendly country, Canada, as opposed to Venezuela or Saudi Arabia.”
Alternatives to a petroleum-powered society, like making electric cars more accessible, have also been backed by the Biden administration.
Handfield said, however, that the shortage of materials to build batteries prevents a large-scale energy transition in the short term.
“The thing is, it’s not Joe Biden’s fault,” he said. “It is not the fault of the government. It’s a supply chain issue, and oil issues are just a function of the current state of the global economy. There is nothing that can be done about it.
In addition to individuals, public transport is also affected by the rise in prices. So far, Chapel Hill Transit has largely avoided rising gas prices, having brokered a gas price deal at the height of the COVID-19 pandemic. According to Chapel Hill Transit manager Brian Litchfield, this agreement will continue until the end of the year.
He said Chapel Hill Transit only paid about $1.70 per gallon for diesel fuel during the current contract. However, when the next round of negotiations begins next year, the market price of diesel fuel will be much higher, Litchfield explained.
This price change must be factored into current and future budgets, he said.
“If we increase our budget by $1 million, it would be nice to say, ‘Hey, community, we have $1 million in new services that we’re going to provide,'” Litchfield said. “Unfortunately, when we see fuel costs going up and things like that, we have to increase our budget, but we’re not able to translate that into service improvements.”
Gas prices are slowly trending lower, but still hover around $4.50 per gallon on average in North Carolina.
To get the day’s news and headlines delivered to your inbox every morning, sign up for our email newsletters.