Rising gas prices have drivers wondering, “Is this true? »

After months of working from home, Caroline McNaney, 29, was excited to return to work in an office, even though her new job in Trenton,...

After months of working from home, Caroline McNaney, 29, was excited to return to work in an office, even though her new job in Trenton, NJ, meant commuting an hour each way.

But when she spent $68 to fill up the gas tank of her blue Nissan Maxima this week, she felt a wave of regret about changing jobs.

“Is it real?” Mrs. McNaney remembers thinking. “I took a job further from home to make more money, and now I feel like I haven’t done anything for me because the gas is so high.”

The recent rise in gas prices – which the war in Ukraine has pushed even higher – has contributed to his sense of disappointment with President Biden. “I feel like he wants us to go out and spend money in the economy, but at the same time everything is inflated,” she said.

Around the world, Americans are feeling the sting of rising gasoline prices, which hit a national average of $4.07 a gallon on Monday, up more than 10% from a week ago. The last time consumers had to deal with such a period of soaring prices was when the global economy collapsed during the 2008 financial crisis. (At that time, the average price per gallon reached approximately $5.37 after adjusting for inflation.)

This time, high gasoline prices are hitting during multiple crises, including Russia’s invasion of Ukraine, a receding but still not over pandemic, and the highest levels of inflation in 40 years.

Gas prices were already rising before the invasion last month, as oil suppliers scrambled to meet growing demand from consumers and businesses recovering from Covid disruptions. But calls in recent days by U.S. lawmakers and others to ban imports of Russian oil have raised concerns about another hit to global supplies. Prices at the pump, meanwhile, soared rapidly.

The shock of the stickers creates a conundrum for the Biden administration, which is trying to isolate Russian leader Vladimir V. Putin without squeezing the US economy in the process.

The extreme prices — which for some types of gas have hovered around $6 a gallon in parts of California — could be fleeting. Accelerating production in shale oil fields in Texas and other regions should soon begin to rebuild supplies.

Michael Feroli, chief U.S. economist at JP Morgan, said he expects consumer spending to slow in the coming months as Americans pay more to fuel up. Some people will be able to dip into their savings to partially cushion the blow, he said.

“The long-term impact should be somewhat minimal,” Feroli said.

Gasoline accounts for a fairly small share of overall consumer spending, but because gas prices are so visible – displayed in giant numbers along every highway in the country – they have an outsized influence on perception that people have about inflation and the economy.

That perception is increasingly bleak, according to surveyed drivers refueling on Monday. They said the higher prices had already caused them to cut back on spending and indulgences like going out to eat.

For many, high prices are another frustrating obstacle in their efforts to get back to normal after the pandemic.

Since arriving in the United States from Torreón, Mexico in 2007, Jesús López, 36, was used to gas prices rising steadily for a few days, but eventually falling. Mr López said this time around he felt different because he saw no stopping the climb when he filled up the tank of his 2008 Ford Expedition.

Mr. López, who works as a janitor at a school in Dallas, said if prices continue to soar, he would have to cut back on his leisure activities.

“It’s sad that if I stop going to restaurants, a toxic cycle is created,” Mr López said. “If I stop spending money on a restaurant, they will have less income and people could lose their jobs.”

Mr. López said he sympathized with Ukrainians, but lamented that the conflict abroad is also affecting the working class in the United States.

“If I have to spend more to go to work, then I will,” he said. “I’ll just have to administer and budget my money more if I want to continue to have a decent lifestyle.”

Sandy Ramos, 24, who lives in Cerritos, Calif., says much of the money she earns from her part-time job as a research and development engineering intern now goes to the food and gas.

She considered taking public transportation to work instead of driving, but it would add time to her already hour-long commute. Instead, she saves money in other ways, like cutting back on clothes.

Ms Ramos said she didn’t know where to direct her frustration with petrol prices. “I don’t know who to blame or what to blame,” she said. “I feel like someone has to be responsible for that.”

As global oil prices have soared since Russia’s invasion of Ukraine, President Biden and the Democrats, who control Congress, have faced consumer anger.

Cat Abad, 37, who lives in the San Francisco area where prices have reached nearly $6 for the highest quality gasoline, said he saw stickers on pumps at a local station stating that Mr. Biden was responsible for the hike. She removed the stickers, she said, believing he was not at fault.

Still, she said, “It’s a good time to have a Prius,” as she fueled up for her drive up the peninsula to Foster City.

Inflation is already proving a perilous issue for Mr. Biden and his fellow Democrats as the midterm elections approach, with many voters blaming them for failing to get the rising cost of living under control. Rising gas prices add further political complexity for Mr Biden, who has pledged to reduce the country’s reliance on fossil fuels.

In light of the war in Ukraine, the energy industry is pushing the Biden administration to further support domestic oil production by opening up drilling on federal lands and restarting pipeline projects.

“This moment reminds us that oil and natural gas are strategic assets and that we must continue to invest in them,” said Frank Macchiarola, senior vice president of the American Petroleum Institute, a trade group.

The pressure on consumers may be temporary as global oil supply and demand are rebalanced. And, in the short term, lower consumer spending could have some benefits. Reducing spending could help limit inflation, but at the cost of slowing economic growth.

Even before Russia invaded Ukraine, rapidly rising energy prices were contributing to the fastest inflation in 40 years. Energy prices — not just gasoline, but also home heating and electricity — accounted for more than one-sixth of the total increase in the Consumer Price Index over the 12 months ending in January.

The recent spike in energy prices will only make the problem worse. Forecasters polled by FactSet expect the February inflation report, to be released by the Labor Department on Thursday, to show consumer prices rose 0.7% last month and 7.9 % over the past year. The continued rise in gasoline prices over the past week suggests that headline inflation in March will hit 8% for the first time since 1982.

Some drivers said the rise in petrol prices was the necessary result of a tough line on Mr Putin.

Alan Zweig, 62, a window contractor in San Francisco, said, “I don’t care if it goes to $10 a gallon. It costs me dearly, but not what it costs those poor people in Ukraine.

Destiny Harrell, 26, drives her silver Kia Niro hybrid about 15 minutes each day from her home in Santa Barbara to her job at a public library. She is now considering asking her boss if she can spend a few days working from home.

She said rising prices had contributed to her anger at Mr Putin and his decision to invade Ukraine.

“It’s super frustrating that a war that shouldn’t even really affect us has global reach.”

Ben Casselman, Coral Murphy Marcos and Clifford Krauss contributed report.

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Newsrust - US Top News: Rising gas prices have drivers wondering, “Is this true? »
Rising gas prices have drivers wondering, “Is this true? »
Newsrust - US Top News
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