On Sunday, March 6, 2022 the average price for gas was raised $4 per gallon, the highest level since 2008. Prior to this increase, the average price per gallon a year ago was $2.76, as the market was still recovering from business shutdowns and the pandemic. Earlier this week, Head of petroleum analysis, Patrick De Haan tweeted, "To make it implicitly clear, this is the cost of bipartisan sanctions on Russia for their war on Ukraine…[$4/gallon] was unlikely to have happened without Russian action." Russia is one of the world’s major oil exporters, with most of its output going to Europe and Asia. Its oil has made up 2% of US imports, according to Energy Department Data. Due to Russia’s attack on Ukraine, the sanctions on Russia’s economy have so far exempted oil exports. Because of this, traders have been reluctant to purchase Russian oil due to uncertainty about closing transactions, given the limits on the country’s banking sector.
In his State of the Union speech, President Biden warned the country that the invasion of Ukraine by the Russian military would have an effect on every American. In response to Russia’s actions, Biden announced that the U.S. and 30 other countries were working together to release 60 million barrels of oil, 30 of which will come from America's own Strategic Petroleum Reserve. Biden explains how this action "will help blunt gas prices here at home."
In short, this definitely is not the end of the increase in gasoline price. Personally, I don’t like having to pay 20 cents more than what I was usually paying for gas a month ago. From what I know so far, as a solution I believe the United States should should cut their relations with Russia, and build stronger relationships with the big time gas countries like Dubai and Canada.
https://www.cnn.com/2022/03/06/energy/average-us-gas-price-hits-four-dollars/index.html
https://www.caranddriver.com/news/a39338671/us-gas-prices-skyrocketing-future/
Questions:
What are your thoughts on the increase of gasoline cost?
How has the increase in cost affected you or someone you know?
1 comment:
The increase in gas price has definitely affected me. I went from paying $100 to fill up my tank to ~$125 (I unfortunately have to use premium, so its even more expensive). I think as crude prices rise, costs of gas will continue to skyrocket, and even if there is a steady supply of oil (I heard a stat on PBS Newshour yesterday that only about 8% of US crude is from Russia, I apologize if I got that number slightly off, but its not that big, and I also heard that oil companies prepared for the latest sanctions by diverting oil sourcing), gas prices will likely continue to rise. I read an interesting analysis that explained how if gas prices rise, Americans spend less on things other than gas to compensate, leading to lower revenue for companies, leading to lower stock prices, higher unemployment, etc. We’ll see if that analysis is correct, but if it was it will be a disaster.
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