How bad is the situation?

We live in a world where gas is an everyday commodity. Prices are posted everywhere and most people know what a gallon of gas costs. In fact, gas prices are an easy shorthand for the rest of the economy. Consequently, they affect our perception of politics and the economy. You may be surprised to learn that the average cost of gas is already up more than $6 a gallon.

A recent report by JPMorgan predicted that gasoline prices could reach over $6 per gallon by August. And by May or June, the national average will be around $6.01. By December, the national average will rise to just over $7.01 a gallon. But it's not all bad news for consumers. Despite the bleak outlook, a few factors will keep prices on the rise in 2022. First, the Biden administration's decision to release strategic oil reserves is expected to help reduce the amount of gas that goes through our nation's roads. U.S. government forecasts a decline in the price of gas and oil by the end of 2022, private sector predictions suggest the opposite. The U.S. government's predictions are based on estimates of current prices.

Who is to Blame?

High gas prices are caused by commodity traders who purchase oil and gasoline on the futures markets. These traders don't actually plan to own the gasoline, but instead intend to sell the contract for a profit. This means that as the price of oil and gas fluctuates, the price of gas follows suit. This is because the price of these commodities depends on what people expect to pay for them. So, if gas prices keep going up, it might be time to rethink your travel plans.

Your Lifestyle is in Jeopardy.

The high cost of gas can affect everyone's lifestyle. Low-wage workers have become more conscious of their spending, and this makes them less likely to take vacations or buy anything new. Others must drive to work, either as a commuting option or as part of their job. For those who need to drive to work, high gas prices have a negative impact on their take-home pay. Further, many people live in rural areas with few options for public transportation.

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