So why are gas prices so high? Experts say the biggest factor is globally priced crude oil
NEW YORK -- Gas prices continue to inch up and have now reached historically high levels, with the national average for a gallon sitting at $5, up nearly $2 from last year.
CBS2's Jessica Moore explains what's fueling the surge at the pump and what the White House is trying to do about it.
The cost of gas is becoming a major problem for drivers across the country, but Moore wondered how many people actually know why the cost of fuel is so high.
Some say supply and demand, inflation, the war in Ukraine, and taxes, but AAA spokesperson Robert Sinclair says there's one real concrete reason.
"Without a doubt, it's crude oil, and crude oil is a globally priced commodity," Sinclair said.
He added there are four main contributors to the price of gas, including taxes, distribution and marketing, and refining, but about two-thirds of what you pay comes down to the price of crude oil, which is up 70 percent from last year.
"Russia was and is a major producer, so you take 10 percent off the market and suddenly everybody is scrambling," Sinclair said.
Refineries make up the next biggest cost suck. There are more refineries in Southern states, where gas tends to be cheaper. Out West, Californians typically get hit the hardest, because there are fewer refineries.
"In California, you have to drive and that makes gas more valuable and with fewer refineries gas is more expensive," Sinclair said.
President Joe Biden is now calling on oil refineries to increase supply. In a letter to the country's seven major refineries, the president also slammed their high profit margins, saying big oil companies should make less in order to help the American people save a little bit.
"The amount of profit being taken is astonishing. Oil and gas companies had record profits in first quarter -- 225 percent over first quarter of last year. In March, the price per barrel of oil was about $120 per barrel, like it is today, but in March we were paying about $4.25 per gallon, so there is a 75-cent increase. What is going on there?" U.S. Energy Secretary Jennifer Granholm said.
The U.S. is the largest producer of crude oil, which begs the question: why are we still paying so much?
"It is because that oil is traded on a global market. So, today the price of oil per barrel is about $120. People are paying that in countries all over the world," Granholm said.
The president has directed Granholm to hold an emergency meeting with oil producers to strategize ways to help bring prices down. A couple of ways the White House is considering are boosting oil production and refinery capacity, and also by convincing gas companies to limit their own profits in the short term for the good of the country.
The White House has been releasing about 1 million barrels of oil from the strategic petroleum reserve every day to try to curb prices.
