Gas Prices Hit 2023 High but Remain Far Below 2022 Peak
Gas has reached its highest average price since late 2022, according to data from AAA, hitting a national average of $3.75 per gallon on Sunday for regular unleaded gasoline.
You might think that all the summer driving is behind higher prices, but compared to 2022 or 2021, demand is "tepid," said AAA spokesperson Andrew Gross.
Instead, it's lower supply that's driving prices upward. Last month, Saudi Arabia, the largest OPEC+ producer, said it will continue through August the 10% cut (1 million barrels per day) that it began in July. Russia said it will cut an additional 500,000 barrels per day in August, according to Russian news reports.
Extreme heat across the U.S. has also constrained supplies, said Gross, by lowering the amount of oil that refineries can turn into gasoline.
While gas prices are 20 cents higher than in June, they are still well below the $4.23 per gallon paid a year ago, or the all-time high of $5.01 in mid-June 2022.
As gas prices climbed higher Friday, the National Highway Traffic Safety Administration proposed an 18% increase in the fuel economy of new vehicles. If adopted, automakers would need their fleets to average 43.5 miles per gallon by 2032, compared to the existing standard of 36.75 miles per gallon that fleets must average by 2026.
Reaching even the lower standards will be a big climb from current fuel economy of new vehicles, which was 25.4 miles per gallon for the 2021 model year, according to the EPA.
President Donald Trump is talking up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence by a new partnership formed by OpenAI, Oracle and SoftBank. The new entity, Stargate, will start building out data centers and the electricity generation needed for the further development of the fast-evolving AI in Texas, according to the White House. The initial investment is expected to be $100 billion and could reach five times that sum. While Trump has seized on similar announcements to show that his presidency is boosting the economy, there were already expectations of a massive buildout of data centers and electricity plants needed for the development of AI.
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