---
title: The news around gas prices, explained
description: How we got here, and what’s being done to fix it.
---

[Hustle News ](https://hs-sbup.thehustle.co/news)

# [The news around gas prices, explained](https://hs-sbup.thehustle.co/news/06232022-gas-prices)

 Written by [Jacob Cohen](https://hs-sbup.thehustle.co/news/author/jacob-cohen) | Jun 23, 2022 7:47:53 AM

What’s worse: sitting in a car with someone who passes gas, or simply looking at gas prices that are up [60%+](https://gasprices.aaa.com/) since last year?

Here’s why prices at the pump are so high, and what’s being done to fix it.

#### **First, what goes into the price of gas?**

The price of crude oil [accounts](https://www.vox.com/2022/6/17/23169695/record-high-gas-prices-economy-impact) for **60%**. Russia’s war in Ukraine led to a global reduction in crude supply, driving prices higher.

The other **40%** comes from refining that oil, distribution, and taxes.

During the pandemic, practically all forms of transit ground to a halt and prices crashed with demand. Demand has recovered, but production hasn’t, further exacerbating prices.

#### **Can’t we just produce more?**

It’s possible, but it isn’t cheap. Drilling, refining, and transporting oil requires expensive machinery and talented manpower.

Despite record profits, oil companies are reluctant to invest in increasing outputs because:

- They’re already short-staffed following pandemic layoffs.
- Many machines have been decommissioned.
- There’s a risk in producing too much and sinking prices.
- The world is heading toward greener energy in the long term.

Of course, those reasons don’t sit well with activists and politicians, who have [excoriated](https://www.newyorker.com/news/our-columnists/as-gas-prices-reach-new-highs-oil-companies-are-profiteering) oil companies for buying back stocks instead of ramping up production.

#### **Did Biden get rid of the gas tax yesterday?**

Kinda. He [called](https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/22/fact-sheet-president-biden-calls-for-a-three-month-federal-gas-tax-holiday/) on Congress to implement a three-month gas tax holiday. Currently, there’s an 18 cent/gallon federal tax on regular gas.

- Biden previously announced the release of **1m barrels** of oil per day from US reserves.

But these are temporary Band-Aids for deep industry problems. For now, here’s a [funny gas tweet](https://twitter.com/greg16676935420/status/1539296442183041026).

[View full post](https://hs-sbup.thehustle.co/news/06232022-gas-prices)

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