Gas prices, already high, stand to rise even more, now that Russia has invaded the Ukraine. That’s because Russia is a major producer of oil and natural gas. While the US doesn’t get its fuel from Russia, Europe does. Why does that mean a price hike at the pump for Americans?
Because Europe is going to feel the sanctions on Russia in their European pockets. That translates to an economic slowdown for the US, because the people of Europe won’t have the wherewithal to buy US goods and services. This in turn, means less demand for American products, so that firms will produce less and hire fewer people.
Already oil prices have surged to $100 per barrel. The Dow Jones Industrial Average, meantime, on Tuesday, in advance of the invasion, had already fallen more than 480 points. Sen. Lindsey Graham, R-South Carolina, said he believes that gas prices are to undergo a significant rise, while Columbia University Professor Sharyn O’Halloran commented that the price of gas is going to go up, but so will many other items. “The price of meat is going up. The price of bread is going up, and milk,” O’Halloran said. “It’s going to put the American worker in a squeeze,” said O’Halloran, an expert in political economics and international and public affairs.
Another Economic Setback
The US is already struggling with inflation over the past several months, which has already led to price increases at the supermarket, as the cost of food climbs ever higher. Recovering from the pandemic is a part of the problem. Now we have this situation with Russia which will no doubt be yet another a setback for the American economy and for world markets too.
President Biden has promised to prevent gasoline price increases. “My administration is using every tool at our disposal to protect American businesses and consumers from rising prices at the pump,” said Biden on Tuesday.
Yet, gas prices have already risen.
Car Buyer’s Remorse at the Gas Pump
In September 2020, the Kars4Kids Blog noted the switch from public transportation to private cars as a result of the pandemic. People just didn’t want to risk traveling in close quarters with other passengers on buses, trains, and subways. This translated to more people buying new cars.
It’s true that we can only guess at how the Russian invasion of Ukraine will affect the way Americans get to where they’re going, whether commuting to work or driving to the supermarket. But it’s easy to see that all those people who purchased private cars, may now regret that decision. The remaining question is whether those who can no longer afford gas, will be able to sell the cars they so recently purchased.