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Kendall County area motorists are feeling the same big pain at the pump as motorists across the country as gas prices have reached record highs this week with the prospect of still more increases coming in the days and weeks ahead.
On Tuesday afternoon the average price of gas in Kendall County was $4.49 according to Gasbuddy.com, though the majority of gas stations in the Oswego, Montgomery, Yorkville and Plano areas were selling regular gas at $4.59.
Two gas station in Montgomery, the Citco at 310 Webster Street and the BP at 1700 Orchard Road, were offering the cheapest gas in the region at $4.39 per gallon.
Among neighboring counties, the average price of gas in Will County was $4.50, $4.38 in Lake, $4.41 in McHenry, $4.45 in Kane, $4.49 in DuPage, $4.26 in Lee, and $4.43 in LaSalle.
Gas prices averaged $4.17 per gallon nationwide and $4.50 per gallon in Illinois Tuesday, which ranks 7th highest in the country, according to the American Automobile Association. Those prices reflect an increase of 55.7 cents per gallon hike from last week and 80.5 cents from last month.
Rising gasoline prices are a direct result of higher oil prices due to supply chain disruptions caused by global market changes. As of Tuesday, the barrel price of oil was $128, compared to $61 one year ago, a gallon of regular gasoline could soon reach $5, according to the American Automobile Association.
Oil prices are rising worldwide due to the conflict in Eastern Europe. Russia is the world’s second largest oil exporter behind only Saudi Arabia, and several nations have imposed sanctions on the country amid the war. Russia’s oil exports are now under what amounts to a ban, as shippers are refusing Russian oil, countries are turning away Russian tankers and banks are refusing to extend credit to Russia.
President Joe Biden announced announced Tuesday the U.S. will ban all Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, but he acknowledged it will bring higher costs to Americans, particularly at the gas pump. Unlike the US, which is the world’s largest producer of crude oil, Europe relies on imports for 90% of its gas and 97% of its oil products. Russia supplies 40% of Europe’s gas and a quarter of its oil. The U.S. does not import Russian natural gas.
In 2021, the U.S. imported roughly 245 million barrels of crude oil and petroleum products from Russia — a one-year increase of 24%, according to the U.S. Energy Information Administration. Shutting down a significant chunk of the country’s oil supply is bound to raise prices, said Carl Campbell, an economics professor at Northern Illinois University.
“There’s going to be less supply, and that drives up price substantially,” Campbell said. “We also produce a lot of our own oil, and we get a lot from Saudi Arabia and the Middle East.”
When global markets are disrupted and supply decreased, gas station owners typically pass that price change onto the consumer.
A drastic increase in prices at the pump has happened twice before amid world conflict, Campbell said. In 1973, during the Arab-Israeli war, the United States sided with Israel and other oil producing companies in the Middle East halted supplies to the U.S. In 1979, the Iranian Revolution led to less oil production.
“As a result, gasoline [prices] rose dramatically in a short period of time, and that led to both high inflation and to a recession in the U.S.,” Campbell said.
Inflation is at a 40-year high. Over the weekend, the national average of gasoline rose above $4 per gallon, the highest since 2008.
Campbell said he wouldn’t be surprised if inflation, already at 7.5%, rose above 10%.
“I think we’ll definitely see [inflation] go higher, because gas prices are rising and oil is a factor of production for so many industries like heating,” Campbell said.
It’s hard to predict how quickly prices will rise after Biden’s announcement on Tuesday, Campbell said, or how long they’ll stay that way.
“It really depends on what happens over in Ukraine,” Campbell said. “If Ukraine and Russia were to reach some kind of negotiated settlement within the next week, I think oil and gas prices would come down right away. I think it if gets drawn out it’ll remain high for a long time.”
For some, as Biden’s remarks suggested, that’s a necessary price to pay.
“It hurts our economy, but I personally think it’s worth it in order to support Ukraine, even though it makes us worse off,” Campbell said. “I think obviously the invasion is wrong and Ukrainian people have shown tremendous courage and resolve, and we want to do whatever we can to support them.”
*Shaw Media Editors Kelsey Rettke and John Etheredge, and Reporter Shane Taylor contributed to this story.