While oil prices are decreasing, drivers are still seeing high prices at the pump.
In Florida, the average price for a gallon of gas dipped to $4.17 a gallon, according to AAA.
“The price of gasoline is on a downward trend. We saw a steep drop in the price of oil and gas prices are slowly moving back to align with that oil price drop,” said Mark Jenkins, AAA spokesperson.
The tendency for gas prices to shoot up like a rocket when the price of oil spikes, but only drop like a feather when oil drops is nothing new.
“Unlike gasoline, crude oil is the input for a wide variety of products not just for gasoline that we get at the pump. So there is some dispersion some separation that we get between crude prices and pump prices, that might explain it,” said Dr. Tom Smythe, Professor of Finance at Florida Gulf Coast University.
Smythe said the lag is also because the oil market is extremely volatile and oil companies are reluctant to drop their prices and global crude supply remains a concern.
“Significant enough supply shock that leads oil companies to not increase or decrease prices as fast as they do in normal markets,” said Smythe.
On Monday, Congressman Vern Buchanan unveiled a plan to lower gas prices and secure U.S. energy independence.
The 8-point Buchanan Energy Independence Plan calls for the following:
- Approve existing oil and gas leases on federal lands
- Expand natural gas and liquid natural gas (LNG) production and exports
- Reauthorize the Keystone XL pipeline
- Reverse the Biden administration’s moratorium on drilling the Arctic National Wildlife Refuge (ANWR)
- Prohibit the U.S. from buying oil from our enemies
- Expand nuclear energy production
- Extend 100% immediate expensing for new capital purchases
- Invest in solar energy storage
“We got a new battery facility that stores solar energy in Manatee County. It’s huge. So, there’s a lot we can do in that space, but we still have to be able to drill more and have more oil and gas in this country to get the prices down,” Buchanan said.