Rising Gas Prices: A Continued Effect of COVID-19 Shutdowns


Photo Courtesy of Viking Motors

Sarah Richman

Recently, gas prices nationwide have been extremely high, both because there is an increased demand for gas now that COVID-19 is less of a threat in the United States and because of a shortage in oil production.

At the beginning of the pandemic, gas prices dropped dramatically as people remained in their homes and did not use nearly as much gas as they typically had. However, prices have nearly doubled since this time. 

When people began to travel more as vaccines became available in the United States, Americans used their cars more and gas prices began to rise noticeably. Now, over seven months later, gas prices are over 44 percent above their levels around this time last year. It is important to also look at gas prices from 2019 because the demand for gas in the fall of 2020 was affected by the COVID-19 pandemic. Currently, gas prices are 20 percent higher than their 2019 value in autumn. This is the highest they have been since 2014 when gas prices reached a record high in America.

While the demand for gas has increased, the supply of gas has not been sufficient. When many workplaces shut down at the start of the pandemic, oil production decreased as Americans’ demand for gas simultaneously decreased. Production has since increased, but this increase has failed to lower gas prices to pre-pandemic levels. It can take months or years for oil production to affect the economy, so an increased production of oil would not be an immediately effective solution.

President Biden and his administration have pleaded with the Organization of the Petroleum Exporting Countries (OPEC) and other oil-exporting groups to increase production because gas prices rose so greatly in the United States. However, these organizations have only agreed to increase production slightly. One reason for their reluctance to increase production is that the oil industry is in a fragile economic state. The oil industry has not recovered from the sudden drop in demand and prices due to the pandemic, so oil-producing facilities are hesitant to make more drastic changes to oil production rates. Additionally, oil production has a large and negative impact on the environment, so global efforts to aid the environment sway companies from producing additional oil.

At least for the next few months, gas prices in the United States are unlikely to lower substantially. In fact, it seems as though prices will continue to increase, so Americans should be prepared to continue spending greater amounts of money on gas.