Gas prices rise for 32 days straight
Gas prices have risen for 32 days straight, according to
AAA.
That means that the average price for a gallon of regular
unleaded gasoline has increased more than 13% over that period to $3.73.
It's hitting wallets right in the middle of winter, when
people are already looking at large home heating bills. And it comes just after
many Americans have been hit with smaller paychecks, and are worried about
looming budget cuts that could deliver an even deeper blow.
What's behind the higher prices at the pump? It's a
confluence of factors, from rising crude oil prices, to production cuts and
refinery closings.
"Right now, things are tight worldwide," said
Ray Carbone, president of New York commodities trading firm Paramount Options.
"Refineries going down, unanticipated maintenance, and higher demand ...
going into driving season."
Two-thirds of the cost of one gallon of gas comes from
the price of crude, which has jumped 10% in the last two months, according to
the Energy Information Administration. As the U.S. housing market experiences a
resurgence, the jobs picture brightens and consumer spending expands,
anticipation of higher oil demand is driving up prices. At the same time, fears
have ebbed that there would be a protracted slowdown in China's economy, which
would have dampened global demand for oil.
OPEC, the powerful cartel of petroleum exporting
countries, is also believed to have cut production by about 1 million barrels a
day in the last few months, partly in response to rising oil production
elsewhere, notably the United States.
Adding to that, several refineries are either preparing
to, or have already, shut down for maintenance before their annual switch to
summer gasoline, which is formulated differently.
For the average American, all this couldn't be happening
at a worse time.
Most of the country's 160 million workers are taking home
less pay each week since the payroll tax cuts expired last month.
The government in 2011 had temporarily lowered the
payroll tax rate for the first $113,700 of annual earnings in an effort to keep
more cash in the pockets of Americans and provide a boost to the economy.
Now, workers earning the national average salary of
$41,000 are receiving about $60 less on every monthly paycheck.
Many Americans are also worried that the federal aid
programs they rely on are on the chopping block. Next month, lawmakers will
face off against the so-called "sequester," which will slash $85
billion from federal agencies over seven months.
By some estimates, up to 1 million jobs will be lost even
as millions of federal workers will be furloughed and a bevy of programs and
services across the government will be curtailed.
In such a scenario of widespread furloughs and job cuts,
gas price will likely have a deeper impact if they continue to rise.
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