Gas prices are soaring across the country and the national average is nearing $5 per gallon. The government might be working hard to find solutions to ease the pressure at the pump but according to Goldman Sachs, the future looks even worse. Economists at the investment banking group have predicted that it’ll feel like there’s roughly a 34 percent bump in prices later this year.
According to Business Insider, the firm said on Tuesday that while it expects the average price for a barrel of oil to hit a cap somewhere around $140 later this year, to the consumer at the pump it’ll feel more like $160. That’s a 34.45 percent increase over the $119 cost associated with a barrel today.
Of course, that could end up putting the national average somewhere around $6.70 per gallon. Keep in mind too that we’re talking about regular 85 or 87-octane gasoline. The national average right now for premium, which more cars are running these days, is $5.55. A 34 percent bump on that price would make the new total $7.43.
Related: New York Suspends Gas Tax For The Rest Of 2022 To Ease Pressure At The Pump
“A large spike in prices remains quite possible this summer when demand seasonally reaches its peak,” Jeff Currie, a chief commodities strategist from Goldman Sachs said. Interestingly enough, one of the major issues with regard to high gas prices isn’t the war and it isn’t low production of oil.
Instead, much of the crunch comes from a lack of refining capacity or the ability to turn crude oil into gasoline and diesel. In fact, the analysis specifically says that there’s “an unprecedented refining shortage” right now. What seems like an all-new fuel crisis is pushing action from all over the system including states which are suspending their fuel taxes.
Last week, we reported on a suspension of the gas tax in New York that will last until the end of the year and ultimately cost the state more than $500 million in revenue. Even those sorts of solutions aren’t doing a great deal, though, considering that they often remove less than 0.50 cents from the total price.