SAVANNAH, Ga. (WSAV) — Gas prices in Georgia exceeded the record set back in 2008 on Wednesday, rising $0.10 overnight and $0.63 from last week, according to AAA.
As of Wednesday evening, the average for regular gas in Georgia is $4.17 per gallon and diesel is $4.88, according to AAA. In South Carolina, the average for regular is $4.02 per gallon and $4.85 for diesel.
The record-high prices come after President Biden announced the U.S. will ban imports of Russian oil. While the high cost at the pump certainly affects drivers, it also impacts the local economy.
Richard McGrath, an economics professor at Georgia Southern University, explained that companies aren’t tied to the market price of crude oil. The more uncertainty there is, the more gas retailers tend to increase prices out of caution.
“You see this volatility in the market,” McGrath said. “Your concern is that if you sell all the gasoline in your tanks at a low price, when you order gas now you have a cash problem.”
The cost of crude oil — which is the gas you put in your vehicle — has been rising since Russia invaded Ukraine almost two weeks ago.
When the president announced the ban on Russian oil on Tuesday, he acknowledged it may affect Americans at the pump. McGrath said the U.S. gets approximately 3% of its oil from Russia, meaning the sanctions may be hurting them more than us.
“It’s their most important export and now they’re selling it at a discount to be able to sell it,” McGrath said. “That’s doing a lot of harm to the Russian oil industry. And it’s not doing as much harm to us because we can buy oil somewhere else.”
Nonetheless, it still creates a bump in the global supply chain, with the effects felt at the pump.
As the price of regular gas tops records, so does the cost of diesel — which McGrath said will have an impact on the regional economy.
“Drivers at the port, all the companies who work at the port, the independent drivers at the port, all of them are paying more for diesel,” he said. “We need to recognize that most of us just look at the price of gasoline as we drive by the gas station but other people have diesel on their mind.”
“We’re a transportation hub. We’ve got a big port and once you get things off of the ships, they go onto rails and onto trucks. All of that gets more expensive,” McGrath added.
McGrath said it’s hard to know how long prices will continue to rise, as the conflict in Ukraine is so uncertain.