The Impact Of Rising Fuel Prices On Transportation Expenses In Phoenix

Fuel costs have risen dramatically throughout the nation, prompting ride-hailing businesses to levy fees and forcing commuters to seek out more cost-effective modes of transportation. According to AAA statistics, Arizona is one of the top ten most expensive gas markets, with an average price of $4.62 per gallon.

Fuel costs, according to AAA spokesman John Treanor, are influenced by the price of crude oil per barrel, which has soared since the United States and European nations sanctioned oil shipments from Russia, one of the world’s largest producers.

“Last week, oil prices peaked at over $123 per barrel; those were record levels,” Treanor added. “It’s now below $110, which is important in terms of what you’ll pay at the pump, but oil accounts for nearly half of what you’ll spend at the pump.”

According to the US Energy Information Administration, gasoline and diesel prices have been rising since last year as embargo restrictions have eased and the economy has recovered, but the pain at the pump has been particularly intense since Russia invaded Ukraine on February 24.

AAA can’t anticipate how much gas will cost in the near future, but when oil prices rise or fall, the effects aren’t noticed at the pump for a few weeks, according to Treanor.

According to a statement released by GasBuddy earlier this month, the national average price of gasoline has surpassed the previous high of $4.103 established in 2008. The previous high was set on March 7, and the national average price was $4.31 as of Wednesday.

In a statement, Patrick De Haan, head of petroleum analysis at GasBuddy, said, “It’s a grave scenario that won’t improve any time soon.” “The high prices are expected to last months rather than days or weeks, like they did in 2008.” The annual national average is now expected to reach its highest level ever recorded, according to GasBuddy.”

Gas costs have risen sharply.

California, Arizona, and other Western states have the highest gas costs compared to the national average of $4.33 a gallon, with weekly rises as high as 48 cents per gallon, according to the AAA gas pricing dashboard.

Arizona gasoline prices per gallon averaged $4.62 for regular, $5.15 for premium, and $5.14 for diesel as of March 16.

California has the highest average price in the nation, with ordinary gasoline costing $5.77, premium gasoline $6.10, and diesel $6.27.

“Gas costs are higher on the West Coast because of refineries,” Treanor said, alluding to local oil production. “There are just more oil refineries on the East Coast than on the West Coast, which implies the East Coast has greater supply than the West Coast.” The farther you are from it, the more costly it is to get oil to your state.”

Despite rising gas costs, Treanor claims that Americans continue to travel during school spring vacations. According to AAA research, 52 percent of Americans intend to vacation this summer, with 42 percent stating they would not modify their plans despite rising gas costs.

However, Treanor predicts that airfares will rise, as will the cost of private ride-hailing services.

According to Robert W. Mann Jr., an aviation expert and partner of R.W. Mann & Company Inc., a 10% rise in aircraft fuel prices would increase total expenses by 3%, causing airlines to either raise rates or add extra fees.

Ride-hailing service Due to the recent increase in petrol costs, Lyft is planning to levy a premium for trips.

According to a statement from the ride-hailing firm, starting next week, Lyft trips will include a 55-cent premium that will go directly to drivers to mitigate fuel expenses. The fee will also be applied to electric car drivers, according to Lyft.

“Recent gas price hikes have increased the cost of all modes of transportation,” the statement read. “As things change, we’ll keep an eye on gas costs, listen to how drivers are affected, and identify methods to help them.”

According to Uber, each journey will be charged a premium of 45 or 55 cents, depending on the location, while UberEats orders will be charged a cost of 35 or 45 cents.

“We understand that costs have been rising throughout the economy, so we’ve done our best to assist drivers and couriers without burdening customers,” Uber added. “In the next weeks, we want to pay special attention to customer, courier, and driver input. We’ll also keep an eye on gas prices to see if we need to make any more adjustments.”

Will more people use the bus or train?
When gas prices rise rapidly, public transportation utilization rises as more individuals seek to avoid paying more at the pump.

For the last five years, Diane Bohonko, a Phoenix employee, has taken a Valley Metro commuter bus from Chandler.

“I believe there are more people riding the bus as petrol costs rise.” “We used to have eight to ten people (riding), and now it’s like 10 to 20 people every day,” Bohonko said, adding that regardless of fuel costs, she’d choose the bus over a private car.

On March 15, 2022, a fare machine at a Valley Metro park-and-ride in Chandler displays public transportation fares. Ridership is expected to rise in tandem with gasoline costs, according to transit officials.

Valley Metro’s public information specialist, Brittany Hoffman, said the organization doesn’t have statistics to demonstrate current rise in ridership, but that the numbers have been climbing over the last six months due to eased Covid-19 regulations and decreasing infection rates.

“We’ve seen an uptick in ridership in the past when there has been a large surge in petrol costs,” Hoffman said. “Obviously, there are certain judgments to be made when you’re spending $4 more at the pump when you could get a bus or light rail ticket for $4 a day.”

The Phoenix Public Transportation Department buys diesel gasoline for municipal buses and trucks from a tank farm that sucks fuel straight from a pipeline, so the price volatility is substantially different from what customers experience at the pump.

Although the department “is not immune to the increased gas and energy costs that are impacting many companies right now,” public information officer Brenda Yanez said in a statement that the agency’s budget can manage it at this time. “We’re keeping a very close watch on everything.”

There are no plans to hike rates, according to Yanez.

“Fare adjustments are a regional decision that goes through a lengthy procedure,” she said. “Valley fares have been unchanged since 2013.”