Analysts expect gas prices to hit $5 a gallon soon, due to inflation and the war in Ukraine. CBS News. Average gas prices are at $3.61 a gallon, which is 26 cents more than February and more than a dollar more than last year. Prices are highest in California, with cities like San Francisco already near $5 a gallon. Oil prices have also increased to $113 a barrel for Brent crude oil. The war in Ukraine is a major driver of higher prices as Russia produced 12% of global oil.
My Comment:
Here in Northeast Wisconsin gas prices are around $3.44, which is pretty expensive. I was smart and filled up both my cars over the weekend before the big price jump. Even then, it cost me almost $40 to fill up my tanks, which were already 1/4 full. That's not a huge problem for me but if someone is in a bad position financially, it would hurt.
High gas prices are a huge driver of inflation. Not only are the high gas costs a major problem in their own, they also increase prices as the cost of transportation obviously increases as well. Food, goods, services, all the costs increase as transportation costs go up as well. It's a cycle that feeds itself.
The article mostly blames the price increase on the war in Ukraine, and it would be stupid to argue that it isn't partially responsible. Russia is a major exporter of oil and the markets fear that their oil could end up being the victim of sanctions. If that happens prices will explode given how important Russian reserves are to the rest of the world. Even the United States buys fuel from Russia.
But it's important to note that oil prices were going up even before the war broke up in Ukraine. Why? Largely because of the policies of the Biden administration. Biden has canceled drilling projects and pipelines, which has caused a massive price increase. This has been a huge problem and the Ukraine war is making it worse.
The sad thing is that we were energy independent under President Donald Trump. We still bought energy but we were also exporting it. This was due to new drilling and an energy policy that was based on what was good for Americans, not based on what the environmental lobby wanted.
It also means that the problem would be easily fixable, all Biden needs to do is lift the restrictions on new drilling and finish pipelines. Doing so wouldn't completely decrease the price, as the concern about Russia is real, but it would absolutely help American citizens. But Biden won't do it. I don't believe for a second he actually believes in global warning, I think its entirely about making people more dependent on the government. After all, if you have a car you can go anywhere you want, but if you are dependent on public transportation, the government can control what you do...
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