- The average US gas price rose to a record $4.374 per gallon on Tuesday, according to AAA.
- State averages differ dramatically, with the average price per gallon hitting nearly $6 in California.
- The price spike has been powered by oil refiners, which are charging record premiums as demand outstrips supply.
After a brief reprieve, Americans are once again staring down record-high prices at the pump.
The average price for a gallon of regular gasoline in the US hit an all-time high of $4.37 on Tuesday, according to AAA data. That's up from Monday's average of $4.33 and roughly $1.41 per gallon higher than levels seen one year ago.
Though the nationwide measure shows prices at fresh highs, costs still vary dramatically from state to state. California boasts the highest average price, with drivers paying about $5.84 per gallon for regular-grade gas. Hawaii and Nevada also tout average prices above $5 per gallon.
Parts of the South and Midwest, however, are still enjoying much more affordable visits to the pump. Georgia featured the lowest average on Tuesday, with a gallon of gas costing about $3.90. Missouri and Oklahoma followed with averages of roughly $3.93 and $3.95, respectively.
The record comes amid a new obstacle in the energy market's recovery. Gas prices first soared in March after the US and allies announced major sanctions on Russian energy commodities. That run-up has reversed course in recent weeks, but the decline has done little to pull gas prices lower. The fault lies with refiners and the so-called crack spread.
Refiners are responsible for turning crude oil into the gasoline and diesel that consumers use to travel. The rough calculation used in the refining industry is known as the "3-2-1 crack spread," which refers to how a refinery can generally process three barrels of crude into two barrels of gas and one barrel of distillate fuel such as diesel. The spread describes the price difference between what refiners pay for crude oil and their selling prices for finished products.
That price difference is also why gas prices are still so high despite cheaper crude. The crack spread hit a record high of $55 per barrel last week, Bloomberg reported, up from the $10.50 average seen from 1985 to 2021. Put simply, refiners are struggling to keep up with demand and are charging much more for their finished goods.
The problem, like many weighing on the US economy, is a massive imbalance between supply and demand. Refiners are running near full capacity, meaning the pickup in crude supply is still running into snags on its way to consumers. Demand has also picked up markedly in Europe, where countries that relied heavily on Russian oil just months ago are trying to quickly wean themselves off Kremlin-linked crude.
Refining capacity is the new bottleneck driving gas prices higher, and with summer set to bring stronger travel demand, the supply-demand gap is likely to worsen.