Gas prices hit 7-year high amid inflation woes, supply chain fears

Average gas prices have hit their highest rate in seven years amid rising inflation and supply chain issues as the economy recovers from the COVID-19 pandemic. 

According to AAA's average gas price calculator, the national average cost of a regular gallon of gasoline hit $3.297 on Thursday, the highest since September 2014, when the average monthly cost hit $3.387.

The U.S. Energy Information Administration reported a national average cost of $3.272 per gallon in September 2021, the highest price since September 2014, when gas cost $3.484 per gallon on average. Last week, West Texas Intermediate (WTI) crude futures, the U.S. oil benchmark, topped $80. 

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The high prices come after OPEC and allied oil-producing countries – including Russia – decided against boosting oil production and instead stayed the course with their gradual approach to restoring output reduced during the pandemic. 

Andy Gross, a AAA spokesperson, highlighted the OPEC decision in a statement to FOX Business.

"The key driver for this recent rise in the price of gas is crude oil, which typically accounts for between 50% and 60% of the price at the pump," Gross told FOX Business. "And last week’s decision by OPEC and its oil-producing allies to not increase production further only exacerbated the upward momentum for crude oil prices, which are now closing daily above $80 a barrel."

The increasing oil prices also come amid high inflation. U.S. consumer prices rose at the fastest annual pace in 13 years in September. The consumer price index rose 5.4% year over year in September, matching the July reading for the starkest jump since 2008. Prices increased 0.4% month over month. Energy prices overall climbed 1.3% in September, reaching a point 24.8% higher than last year.

On Thursday, House Republicans slammed President Biden for implementing what they described as "anti-American energy policies," including Biden's request for OPEC and other oil-producing countries to ramp up production.

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Carol Miller, R-W.Va., and more than 100 Republican lawmakers argued that the administration risks emboldening "known American adversaries," including Russia and Iran, by asking OPEC to increase production. They claim the move is part of a pattern of policies that have hurt American energy independence, including cancellation of the Keystone XL oil pipeline and a pause on new oil and gas permits on federal land.

On Wednesday, White House press secretary Jen Psaki told reporters she was "not aware" of administration outreach to oil and gas companies to decrease gas prices, outreach reported by Reuters.

The White House did not immediately respond to FOX Business' request for comment.