News/Op-Ed: Gas Prices Continue to Spike in the United States
By Ethan Gibbs
In California and across the United States, the cost of gas continues to increase amid global crises and uncertainty, such as inflation and the conflict in Ukraine.
Russia is one of the world’s most important and largest oil exporters. Despite the fact that just a little amount of Russian oil reaches U.S. consumers, oil is priced on global markets. As a result of the consequences of the conflict between Russia and Ukraine, the disruption in Russian oil supply has made prices start to rise. In the last two months, the average retail gallon of gasoline has increased by nearly 25 %, and President Joe Biden’s decision to ban Russian oil imports from the United States is pushing prices higher.
In California, gas prices are rising above the national average, continuing a trend of the last couple weeks. The average cost of a gallon is $5.44 in the Golden State, with prices being higher in large cities such as Los Angeles. California is the only state that has an average cost of more than five dollars per gallon.
“Defending freedom is going to cost,” said President Biden
With the war between Ukraine and Russia going on, President Biden wants to make an impact on Russia’s economy. On Tuesday, March 8th, Joe Biden ordered a ban on Russian oil imports. Although this decision harms the economy of Russia, it also contributes to the increasing gas prices here in the U.S.
In addition, President Biden signed an executive order prohibiting the import of essential Russian items, such as vodka, as well as the export of high-end brands such as luxury cars and designer clothes to Russia. The U.S. and its allies will be able to add higher taxes on select Russian imports, further isolating the Russian economy.
“It has caused the Russian economy to, quite frankly, crater. The Russian ruble is now down 50 percent since Putin announced his war,” said President Biden
According to the Energy Information Administration, the United States imported roughly 672,000 barrels per day from Russia in 2021. This represents around eight percent of total oil and refined product imports into the United States. As the U.S. suddenly cut that off, gas prices obviously rose. Los Angeles, San Luis Obispo and Napa now have gas prices that exceed $5.50 a gallon. In Bellflower, gas is $5.29, in Downey, gas is $5.36, in Long Beach and Huntington Beach, gas is $5.19 and in Inglewood, gas is $5.14.
Inflation in the United States has already risen to 7.9 % in the last year, and that is the highest it has been since 1982, and it is expected to increase even more if the war in Ukraine continues.
As traders began to view Russian crude exports as untouchable, oil prices soared. This has led to concerns about how that supply of four to five million barrels per day will be restored, especially when demand for gasoline typically rises throughout the summer.
On Tuesday, March 8th, Governor Newsom proposed a tax rebate to bring into light the rising gas prices. Newsom believes that if the U.S. continues to drill oil, then that will cause more extreme weather, more extreme drought and more wildfires. A solution that Newsom suggested is that the world’s largest lithium reserves can be tapped into.
Furthermore, China’s resolve to prevent the spread of COVID-19 resulted in a lockdown in the tech capital of Shenzhen. Combined with the new regulations in Shanghai, less people will be outside of their homes, which may mean that the country will require less energy. On a daily basis, China imports around eleven million barrels of oil, and this decline in oil prices helps to keep gasoline costs in the United States from rising.
The gas crisis is an interesting conflict regarding the balance between defending allies and democracy around the world and the economic interest of the United States, as they are at odds with each other in this scenario.