Prices At The Pump Climb As COVID-19 Vaccine Rollout Accelerates

VIRGINIA/DC — Gas prices at the pump hit $3 in the District of Columbia Friday for the first time since 2018, according to AAA Mid-Atlantic. The price per gallon was up 8 cents from the same time the previous week, 35 cents in the last month and 50 cents from a year ago.

In Virginia, gas prices are also on the rise. The current cost of gas in the state is $2.71 a gallon on average. That compares to an average price of $2.63 per gallon the previous Friday, and $2.38 a month ago. The year-ago gas price in Virginia was $2.11 a gallon on average.

The cost of gasoline in the Washington, D.C., metro area is currently $2.82, up seven cents in the last week, 33 cents in the last month and 51 cents more than this time last year. The last time the price of gasoline was $3 a gallon in the Washington, D.C., metro area was on October 28, 2014.

The national gas price average on Friday was $2.83, up eight cents from the previous week, up 33 cents in the last month, and up 51 cents from this time last year. The national gas average has not hit $3 since Oct. 31, 2014. The next closest date was on May 25, 2018, at $2.96, according to AAA.

What’s causing the rise in prices at the pump? The rollout of the COVID-19 vaccine.

Looking back to January, the price of oil was trading at just over $47 per barrel. Two months later, the price of oil was trading at about $61 per barrel.

“There are two factors that have driven up the price of oil. One is that demand collapsed last year as pandemic measures were implemented and people stopped traveling,” energy industry expert Robert Rapier writes. “As the end of the pandemic nears, oil demand is bouncing back. Supply doesn’t respond as quickly, and therefore that puts pressure on prices.”

Second, OPEC and Russia recently decided to extend most of their cuts in oil production output. Despite demand increasing globally, Saudi Arabia kept its cut in oil production in place. “That decision sent oil prices sharply higher, and will likely ensure additional gains in gasoline prices,” he wrote.

“Amid the onset of the pandemic and the promulgation of stay-at-home orders, pump prices dropped to $2 in the metro area on April 15,” said John B. Townsend 2nd, manager of public and government affairs for AAA Mid-Atlantic. “In the wake of the global pandemic and climbing coronavirus cases, stay-at-home orders, and lockdowns in spring 2020, demand for crude oil, jet fuel and motor fuel plummeted, and as a result, crude oil prices traded below the unthinkable — $0 — in a brief interlude.”

A year later, as the world marked the first anniversary of the declaration of the global pandemic, total domestic gasoline stocks decreased as demand increased, according to data from the U.S. Department of Energy's Energy Information Administration.

As COVID-19 vaccines continue to roll out and optimism grows, the market is likely to continue seeing higher crude prices, according to AAA.