At the time of this writing, the Colonial Pipeline that was hacked on May 7 has been back up and running for a few days, restoring normal levels of fuel to the parts of the United States that were facing shortages about one week ago. This was because the pipeline, which just so happens to be one of the most important ones in the country, was forced to temporarily shut down — leading to shortages that drove up prices and instigated panic buying.
In the days following the ransomware attack, gas prices nationally increased by nearly 2.5 percent (though some areas saw increases of up to 11 percent) — and even though the United States is past this gas crisis, experts say that high gas prices are something Americans should get used to this summer. It’s largely because vaccinated Americans now have the confidence to travel again.
Flashback to April 2020 for a moment. The United States was largely on pause. Non-essential workers were asked to do their jobs remotely, airlines were practically grounded and nobody was going anywhere or doing anything. As a result, the demand for crude oil plummeted — and so did the price per barrel. As we began to understand more about the coronavirus and what activities were and were not safe, people began to do more into late spring and summer 2020. Oil producers also adjusted their outputs to help stabilize prices. Overall, however, the average price for a tank of gas remained low.
And that’s what brings us to February 2021, which is when gas prices stabilized to pre-pandemic levels — and because there’s more demand for gasoline, it’s going to cost more. The Colonial Pipeline shut down temporarily escalated gas prices due to a shortage of fuel in areas of the country, but it’s not going to be the reason why gas costs more this spring and summer than it did a year ago. Demand is the true reason. And with more than one-third of Americans already fully vaccinated and about half of all Americans half vaccinated, it’s estimated that nearly 80 percent of Americans will be hitting the road this summer.
When it’s all said and done, that looks to be an increase in travel activity upwards of 60 percent of what it was a year ago. Though many Americans may scoff at higher gas prices, the reason for it is actually a good one. It means that life is getting back to normal.
The Colonial Pipeline hack was unfortunate. So too was the $5 million ransom that the owners of the 5,500-mile pipeline had to eventually pay to the hackers. Also unfortunate was the panic that it set off in certain parts of the United States. We’re beyond that now, and while many may assume that higher prices this summer are related to that, know that they’re not. They’re related to higher demand for fuel.