RALEIGH NC (WNCN) – Although crude oil prices fell this week, it will take longer for the translation to pump out at gas stations.
Tiffany Wright of AAA Carolinas said oil prices are 50 percent of what people pay for at the pump.
Wright said oil and gas companies are quick to respond to changes in market prices, as the world saw last week amid mounting sanctions on Russian oil.
“People are trying to make money and also try to anticipate those losses,” Wright said.
That’s why she said it’s easy to see a 15 cent rise overnight, but when oil drum prices fall, it takes longer for gas prices to follow suit.
“They bought the gas when it was expensive. So if gas stations abruptly lowered their prices, they would be operating at a loss,” Wright said.
On Wednesday, President Joe Biden urged oil and gas companies to cut costs, tweeting that they should “not pad their profits at the expense of hard-working Americans.”
On the same day, Republican Sen. Thom Tillis said it was up to the Biden administration to increase energy production and cut costs.
“We need to work with partners to figure out how to import more crude oil and keep producing here, open leases,” Tillis said. “Or at least make it clear to the energy industry that this is not a one-year phenomenon.”
While drums of oil selling for less than $100 show promise now, there are many factors such as war or even another COVID-19 surge that could change things in the short term.
“I’m hoping that some of those higher gas prices are behind us, but it’s too early to tell if we’ve peaked,” Wright said.
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