Daytona Beach, FL — As gas prices continue to rise, more and more drivers are getting in line, eagerly waiting for their turn at the Sam’s Clubs’ gas station near Daytona Beach’s Tanger Outlets. “We started noticing this line getting busier and busier around the beginning of March”, said Gil Silas, worker at Sam’s Clubs gas station.
The gas station opens for operation at 6:00 AM every morning, and closes at around 9:00 PM. Regardless of when you arrive, though, you’ll find locals waiting in line to save some money on gas. “If I can’t put gas in my car every day, I can’t make money and feed my family, ” says Uber driver Marcus DeSentis, filling up his 2013 Toyota Sequoia which, he’ll point out to you, is a 4WD, not the hybrid, so it burns more gas. “It’s too much,” he continues. “$65 or $75 a day I’m down on gas. It’s getting harder and harder to survive.”
All across the country, Americans are facing extraordinarily high prices at the pumps. Gasoline prices hit an all time high in March 2022, with the average price of gasoline shooting up from under $3, a year ago, to around $4 per gallon today. In some places, like California, it’s over $6 per gallon to fill up your tank.
Diesel, which fuels the freight industry, also recently hit an all time high of $5.25 per gallon. Global jet fuel prices have surged to near 14-year highs, affecting the prices of airline tickets and air freight in turn.
Oil prices soared in late February, passing the $100 mark, per barrel, following the widely publicized Russian invasion of Ukraine. Oil markets at the time were already dealing with low inventories and rising demand, as the world slowly emerged from the coronavirus pandemic. Once the invasion began, so did a dramatic uptick in gas prices.
“We’ve never seen prices increase this quickly. We set a new record for the biggest jump in just one wee,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy
Russia is the world’s third-largest producer of oil and part of the influential Energy Alliance, also known as OPEC+, that includes many of the world’s largest producers. The United States goes through almost 20 million barrels of oil per day and, in-fact imports many of its petroleum products, with only 8% of those products coming from Russia.
In early March, President Joe Biden banned Russian oil and petroleum product imports in response to Putin’s invasion of Ukraine. But with our domestic production of oil, this shouldn’t have much impact, right? As of right now, America is the world’s largest oil producer – so why are fuel prices in America pushed upward by events on the other side of the world?
Addressing Gas Inflation
Despite the White House’s efforts to effectively combat the dramatic rise of gas prices in 2022, numerous reports suggest that gas prices will continue to rise at least throughout the end of the year. The Biden administration, in response, claims to have a plan to manage this critical situation. He has illustrated to reporters a new agenda, assuring the American people of its effectiveness to combat rising gas prices.
On the agenda, Biden plans to increase taxes for wealthy American citizens and, as a result, promote growth in the Affordable care act. His policy will also increase investments towards clean, renewable energy and transportation. Whether or not this will hold any water in the effort to decrease gas prices, however, is yet to be seen.
Why Are Gas Prices So High?
The influx of gas prices nationwide has been largely attributed to the European Union’s initiative to essentially halt all oil trade with Russia until after their invasion of Ukraine has been resolved. While it’s unclear, in the near future, that gas prices will return to a satisfying price of around $2.87, crude oil analysis predicts drops in world market prices.
There are analysts, however, who suggest the price of crude oil will actually rise, increasing the average price of gas alongside it.
Bidens Struggle to Take Impactful Action
With politically inclined strategies for price management taking place across the board, such as the halt of cleaner gas mixes in order to drop prices by 30-to-40 cents per gallon, many approaches will steal focus from eco-friendly solutions. This means more polluted air and higher taxes as some of the consequences of the ongoing battle to combat high gas prices.
Not to be too dramatic, but things will likely be getting worse before they get better. Inflation also plays a big role in why we are beginning to see many day-to-day necessities become so expensive. Overall gas prices have climbed almost 8.5% percent since this past March, alone, and the public is calling for more communication on how the government will help the working class of America, moving forward.
Input From Rick Scott
The former governor of Florida, Rick Scott, calls for a 1-on-1 debate with the President of the United States, saying, “Joe Biden can blame me all he wants. Here’s the truth: he’s the President of the United States. Democrats control the House of Representatives and the Senate. Democrats’ agenda is hurting American families, and no amount of spin can change that.”
The current efforts of the White House to address the Federal Reserve to battle inflation nationwide may not equate to impactful solutions for the country’s people. The Federal Reserve’s call-to-action on preventing the American economy from entering another recession by reducing Trump-administration-era tariffs imposed on China, for now, stands as the most feasible progression currently. That being said, the actual effect it will have on the ever-increasing rate of price spikes in the economy will likely be miniscule, not carrying enough weight for celebration, just yet, analysts suggest.
Prepare For Recession
With an economy fluctuating out of control under the Biden administration, we have seen gas prices, housing, and transportation rise out of control. These spikes in prices can be seen affecting groceries and many other aspects of daily life in American households. It is only a matter of time before this bubble bursts, data suggests. With an overview of what’s been done, so far, to combat the destabilizing economy, it is safe to say that the Democratic “way of doing things”, increasing minimum wages, lowering trade taxes on foreign countries etc. is driving the American economy into a recession. Therefore, it is best to prepare for the downturn ahead of time as, at this rate, no matter how the government plans to fix these issues, a crash is a safe assumption.
High gas prices is one of the first indicators many look for when considering the possibility of a recession. Just before the economic recession occurring from December 2007 – June 2009, America had just come out of a conflict tied to an energy crisis lasting 10 years, and gas prices which sat at a staggering nationwide average of $5.37, fell to $1.67 in December, 2008. To run the risk of another major recession, gas prices across the United States would statistically have to keep rising at the rate they currently are, or even higher, to put our Economy in crisis mode.
During 2008’s recession, gas prices dramatically fell. In the middle of a crashing economy, the world saw and felt the conclusion of The Global Financial Crisis. Looking at prices today, if the cost of oil continues to rise, this will indicate more of the same in the near future. In that instance, the probability of another recession inches even closer to certainty.