Why Are Gas Prices Rising in 2021?
Gas prices are in a constant state of flux, depending on factors related to supply and demand. Currently, gas prices are increasing across the country, as they do every summer when analysts predict that families will be driving to their vacation destinations. But this year, additional factors are at play, and you can expect some pain at the pump for a while.
In 2020, we saw historic low prices at the gas pumps because many people stayed home, foregoing their usual commutes, business trips, and journeys out of town to visit friends and family. As people resume everyday life and the economy ramps back up, demand for fuel is increasing.
Another contributor to increased fuel prices is a truck driver shortage. The National Tank Truck Carriers trade group states that up to a quarter of all tank trucks are sitting idle because there are not enough drivers.
Tank truck drivers must undergo a rigorous training process for certification, which requires a 4-week course and 160 hours of training to qualify for a commercial driver’s license. When fuel demand cratered last year, many truck drivers got other jobs, and now there aren’t enough existing or new drivers to fill the seats.
The driver shortage means tank trucks aren’t getting to their destinations, decreasing the supply of fuel. And to attract new drivers to fill positions, wages must rise, which means gas stations must raise gas prices to help cover delivery costs.
These factors come at the same time as normal fluctuations in seasonal gas prices. California, for instance, has always had higher fuel costs than the rest of the nation because of taxes. Additionally, the state requires the sale of summer-blend fuel from May 1 through mid-September. The summer blend is a different formulation of fuel that cuts down on pollution, and it costs about 10 to 30 cents more per gallon than the winter blend.
A particular aspect that analysts will keep an eye on is what happens to gas prices as the sales of electric vehicles gather steam, driving down fuel demand. Further, many truck manufacturers are developing autonomous trucks, which they say eliminates human error and can arrive at destinations faster and with greater consistency, without the variances inherent in human labor.
One way to combat high fuel prices is by driving a more fuel-efficient vehicle, such as a Honda Accord Hybrid or Toyota RAV4 Hybrid. Alternatively, you could switch to an electric vehicle, such as a Chevrolet Bolt EUV or Ford Mustang Mach-E.
Trusted publications are the sources of information for this article. It was accurate on May 4, 2021, but it may have changed since that date.