It would be difficult – if not impossible – to find a single person who would say they are not being negatively impacted by record high prices at the pump.
Gas prices across the country started rising before Russia invaded Ukraine. But the escalation of the war and sanctions against Russia have pushed them even higher.
Politicians love to point the finger depending on their political agenda. Democrats like to point the finger at oil and gas companies and blame them for higher oil prices. Republicans are fond of pointing fingers at the Biden administration’s policies on climate change and unfriendly policies toward domestic oil and gas exploration.
However, the global commodity market determines the price of oil.
While these claims make for good soundbytes, the reality is that no single person, company or government controls gas prices. A number of factors, including the COVID-19 pandemic that left oil markets in utter disarray two years ago, are part of the equation.
The rapid rise in fuel prices is increasing costs more than just the cost people pay to fill up their vehicles.
While the Kelley Blue Book research states that a $1 increase in the price of a gallon of gas will cost the average driver $56 a month, what about the cost of everyday goods that are also increasing due to gas prices?
Higher transport costs are added to almost everything consumers buy. According to Fortune.com, if sky-high gas prices continue, it could have a significant impact on the U.S. economy, leading to falling consumer demand for all kinds of products as people tighten their belts.
Economists predict that we will hear more often the terms stagflation, recession and demand destruction, which refer to a persistent decline in demand for certain goods in response to persistently high prices or limited supply.
High gas prices will likely be a reality for all of us in the summer and maybe beyond. Consumers can do their part by reducing their driving habits or driving more fuel-efficient vehicles for longer journeys.
But the reality is that we all have to make decisions for now, and those decisions will affect our entire economy down the line.
Enid (Okla.) News & Eagles | CNHI
Comments are closed.