AUGUSTA — The price of a gallon of gasoline hit a record high nationwide Tuesday, pushing the price well above the $4 mark across central Maine.

While gas prices have been rising for more than a year, the sudden hike in the wake of the Russian invasion of Ukraine has shined a bright light on what people are paying to drive their cars.

Lisa Couture Staff photo

For Lisa Couture, the increased price of gas means decreasing choices for people who now have to balance what they want to do with what they can afford to do.

The price of a gallon of regular gasoline in the Gardiner area of southern Kennebec County was about $4.29, with one gas station selling it for $4.44 on the day that President Biden announced the United States will ban all Russian oil imports, a step to further cut Russia off from the world’s economy.

“It’s going to impact everybody’s lives greatly,” Couture said, after stopping briefly in Gardiner on Tuesday to pick up some pastries from the Goldfinch Creamery.

With prices about 55 cents to 60 cents a gallon higher than they were a week ago, the cost of filling a 10-gallon tank increases by $5.50 to $6.

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“You think about our farmers, our truckers, everybody… every aspect of our lives is going to be impacted,” she said.

While her previous job called for her to drive around three counties, she said, her current position has her working five minutes from home — a luxury that not everyone has in central Maine.

Higher gas prices mean people will make different choices about shopping or entertainment, with people deciding that they can’t afford to drive to Portland to shop at Trader Joe’s or Whole Foods, she said.

While people could decide to shop locally, she said, people want the choice to do what they want to do. “It’s never a fun thing to be forced to make those kinds of choices if you can’t afford it,” she said.

Jonathan Rubin, a University of Maine economics professor and director of the Margaret Chase Smith Policy Center at the university, said the price that consumers are seeing at the gas pump today reflects what’s been happening for about a year, the gradual increase in the price of oil from $60 to $65 a barrel to nearly $120.

“It’s really interesting how gas prices are such an important price in our economy to people, as opposed to a gallon of milk, opposed to a loaf of bread, as opposed to other things,” Rubin said.

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The price of gasoline, like the cost of home heating oil, is driven in large part by the price of crude oil. Other costs, he said, like refining, transportation, marketing and taxes also contribute to the prices that consumers pay, but oil is the largest component.

“Some of this rise in the price of crude oil is really due to the economic recovery in the United States and the rest of the world as we come out of COVID, which had artificially dampened the demand for transportation as people stayed home,” he said. “Then, of course, the war tensions on top of that. It’s a combination of all those factors.”

The price of gas at the Randolph gas station for regular unleaded was $4.29 a gallon on Tuesday. Jessica Lowell/Kennebec Journal

The United States is the world’s largest producer of oil and natural gas, followed by Saudi Arabia and Russia.

Rubin said Russia is probably the world’s largest exporter of oil because its domestic consumption of oil is less than that of the United States, but only a very small amount makes its way to the United States. Most of it goes to Europe, China and other parts of the world.

But because oil is priced on a world market, it won’t matter that U.S. consumers are buying domestically produced oil.

What could bring the price of oil down is increasing the supply of oil to the market, either by expanding drilling or tapping the strategic petroleum reserve, which is currently at about 600 million barrels.

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“That’s not comforting to those who have to pay the high prices in the interim,” he said, noting that in his professional opinion, prices won’t remain at this level for a long period of time. “But it’s not like we’re running out of oil. There’s plenty of oil around the world. This is really about the short-term market dynamics of supply and demand.”

A bill making the rounds at the Maine State Legislature would suspend the state’s gasoline tax, a move that Republican gubernatorial candidate Paul LePage is also backing, to give people a break on rising prices.

Rubin said the state’s share is 30.01 cents, and consumers would save that, but the consequence of that is a drop in the revenue that the state’s Department of Transportation uses for building and maintaining the state’s roads and bridges.

“If you want to not pay for road upkeep, that’s a choice,” he said. “There’s more than one study that shows there’s a backlog of I-don’t-know-how-many hundreds of millions of dollars.”

In the broader economy, the higher fuel prices are expected to translate to higher prices, but how much depends on what they are. Rubin said for products that have a lot of oil in them, like home heating oil, the pass through will be almost direct. And the price of nitrogen-based fertilizers are expected to go up significantly because they are made from refined petroleum products.

But the price of other consumer products will increase to a lesser degree, he said.

For her part, Couture sees the price of gasoline has a broad impact on the daily lives of people across the region at work and at play.

“We’re not just talking about gas going up,” she said. “Inflation is crazy, people are trying to keep food on the table. Any kind of recreation, people will think twice about that.”

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