National average for a gallon of gas tops $4, the highest price at the pump since 2008

Fuel prices are displayed at gas stations on March 03, 2022 in Chicago, Illinois. Increasing demand and dwindling supplies coupled with global supply uncertainty driven by the war in Ukraine have driven gas prices over $4-per-gallon in many parts of the country.

The price of gasoline went up to the highest level since 2008 on Sunday, as crude oil supply fears stemming from Russia's war on Ukraine increased the impact on consumers at the pump.

The national average for a gallon of gas hit $4.00 on Sunday, the highest since July 2008, not adjusted for inflation. Prices are rising quickly. Consumers are paying more than a week ago and a month ago.

Consumers are paying more in some places. California's average is now $5.288 per gallon.

The price of oil has gone up due to the war in Ukraine. The underlying cost of oil is more than 50% of the cost of gas that consumers put in their cars.

Russia is a major producer of oil and gas. The market is self-sanctioning and buyers are avoiding Russian products. Russian oil is difficult to find buyers for. The market was already tight prior to Russia's invasion.

Lipow said that the national average will be $4.50 a gallon by the end of the year.

Russian refineries are shutting down because oil buyers are reducing their purchases. Insurance rates are causing vessel owners to cancel ship bookings in Russia and this is also impacting on the ability of Kazakhstan to sell their oil.

The jump in gas price is making people worry about inflation. In the fall, the Biden administration tapped the Strategic Petroleum Reserve to bring down prices at the pump. Some are calling for the federal gas tax to be paused.