Gas prices approach $5 a gallon nationwide, diesel prices hit new highs

Yahoo Finance Video
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Yahoo Finance's Ines Ferré breaks down the latest data on gasoline demand as energy prices continue to climb.

Video Transcript

AKIKO FUJITA: Let's move on here to talk about gas prices. Americans still feeling the pain at the pump as the national average for gas prices approaches $5 a gallon. Ines Ferre is watching the very latest on that front. Ines, I mean, every time we talk, it's another leg higher. It doesn't feel like there's a whole lot of relief in sight.

INES FERRE: Akiko, we are just $0.04 away from a national average of $5 a gallon. That's just for regular gasoline. And in fact, 15 states now have an average of at least $5 a gallon for gasoline. Yesterday, it was 13. Now it is 15.

So at what point does demand destruction kick in? I spoke with Andy Lipow of Lipow Oil Associates. He told me that demand is already starting to be impacted by these higher prices. He pointed to the Energy Information Administration data, showing that gasoline demand over the last four weeks fell by 2% compared to the same period last year. And keep in mind that last year, more people were in lockdown mode. He also says that if prices continue to go higher, which they are expected to go higher, that you can expect demand to fall through 2021, or compared to those 2021 prices.

Also, just keep in mind the impact that this is having on the consumer. I mean, right now, consumers are paying about, on average, $2 more per gallon of gasoline. So if you have a 10-gallon tank, you're paying $20 more for gasoline to fill up that tank than you were a year ago.

BRIAN CHEUNG: Ines, what about diesel prices? We've noticed that they've also been increasing.

INES FERRE: Yeah, well, diesel are also at all-time highs, averaging $5.72 in the US. And the US has been exporting oil, exporting diesel to Europe, which heavily uses diesel. China is also reopening. But again, the consumer getting impacted, again, because diesel prices impact the cost of transportation of goods and the cost of food. And farmers also use diesel for their tractors, so this also impacts food. So consumers are getting it on both ends, at the pump for their gasoline and also for the food prices as well through diesel prices.

BRIAN CHEUNG: All right, Yahoo Finance's Ines Ferre, thanks so much.