New oil drilling permits increasing in Texas, but fuel not expected to hit market for months
WACO, Texas (KWTX) - New data reveals the average price of gasoline in all 50 states has surpassed $4 per gallon and the busy summer travel season kicks is not even underway yet.
Experts say what is fueling the pain at the gas pump is a lack of fuel. Oil and gas companies have picked up production domestically, but it will take a while before we start to see some relief at the pump.
“There is a lot of uncertainty right now,” said Ray Perryman, president of the Perryman Group in Waco.
That uncertainty is mainly related to the oil market. What is certain, however, is more people will be out driving on the roads this summer.
“They simply want to go places after the couple of years of not being able to do that,” said Perryman.
With a low supply of oil in the U.S., that is going to cause those high prices to continue to increase.
There is some good news.
Since March, the amount of oil drilling permits has increased in Texas. That oil, however, is not expected to hit the market for a few months.
“Just like every other industry, they have workforce issues, they have supply chain issues, they have delivery issues,” said Perryman. “All the things that are affecting all the other industries are affecting oil and gas as well.”
There are also other forces that will continue to drive up prices: the Russia-Ukraine conflict is playing a bit part.
Though it is not the root cause of the issue, since prices were going up before that.
“The Ukrainian situation sort of took that and put it on steroids, so to speak,” said Perryman.
Regardless, people are not expected to stay off the roads and away from the pumps, so drivers will have to manage.
Some help is possible from Washington D.C., though. The Senate is expected to take up a bill passed by the House on Thursday that would crack down on gas price gouging.
However, it is not clear if that bill can pass.
“We think the overall inflation picture will probably be with us, most of the rest of this year, starting to get better toward the end of the year,” said Perryman. “The high gasoline prices will probably begin to dissipate in the fall.”
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