Prices at the pump continue to cause pain for Alaskans having to dole out more to fill up their gas/diesel tank. Prices rose more than 50 cents in one week. Last Monday in Kenai, prices were at $3.73 and, as of this morning, prices were $4.63.
Economist Ray Perryman stated that a lot of this has to do with Russia’s invasion of Ukraine, but there are other factors involved:
“With the current emphasis on climate change, it’s pretty difficult for the oil industry to get the capital it needs to rapidly ramp up drilling.”
In addition, he says that the United States is currently experiencing a truck driver shortage, making it more expensive to get the oil to the refineries. As for gas prices, he predicts they will stabilize, and the market will determine what that level will be.
Concerns many Alaskans have raise recently involved ramping up production, but Perryman states that the Biden Administration’s focus on green energy makes it hard for energy companies:
“The other things coming into play is the refiners’ costs is also going up pretty rapidly right now.”
Perryman says there are rigs built, but it takes capital investment to bring them online and that cash is not coming quickly due to the Biden Administration’s focus on green energy:
“The United States has increased some but we’re not able to increase as much as we have in the past.”
Economists and some in the oil industry speculate gas prices in Alaska could possibly hit $5 by the end of March. AAA puts today’s new nationwide gasoline average at $4.17 a gallon, which beats the $4.10 a gallon mark, which was set in 2008.