Everything you need to know to understand how the gas prices affects our lives
There’s a new problem reaching most of the big economies in the world right now: the increase in gasoline prices. That’s a tendency all around the world: even with the salary advance and better payment for side jobs, many countries are suffering with the prices of fuel, and that isn’t different in the United States of America.
Lots of people are trying to understand how the scenario of the increase in gasoline prices will affect their lives, their routine and their savings. That’s what we are going to explain in this article. You will know everything you need about the rising gasoline prices in the US and how it affects our daily lives.
Why is there an increase in gasoline prices happening now?
Gas prices in the United States are at record highs: it’s the biggest price for gasoline that we ever saw, even higher than during the 1970 energy crisis.
That is happening due to a simple factor: the price of the crude oil, also known as petroleum, had increased. Since this is the main component of the gas — according to the Energy Information Administration, the cost of the raw material corresponds to 60 percent of the price of a gallon of regular gasoline — the gasoline prices, consequently, had an increase.
How much people are paying for gas is the result of negotiations and trading for petroleum in the international market, where the supply and demand rule rules everything.
It’s a correlated thing: as the supply and demand rule tells us, with more people looking for petroleum, its prices will rise up. Everytime that the petroleum has an increase in its prices, the gas will also cost more, affecting everything around us.
Why are the United States suffering with the increase in the gas prices?
Even if the United States is one of the world’s largest producers of oil and processed petroleum products, also exporting it for other countries around the world, that does not mean that the United States doesn’t buy petroleum for other countries to supply their needs.
That usually also happens because American refineries also process different types of oil that are not produced by the country. Since it’s difficult and even more expensive to adapt these refineries to process the different types of oil, the United States producers found it easier to import oil to be used in its refineries.
Did the Ukraine War and the pandemic interfere in the gas prices?
Yes! Both of the situations affected and contributed to the increase in the gas prices.
The War on Ukraine affected it since Russia is the world’s second largest producer. With the sanctions that were made against the country, they stopped selling their petroleum production, reducing the available petroleum around the world.
On the other hand, the covid-19 pandemic was something that contributed to the rising of gas prices since it affected the production of everything all around the world, even of gas and petroleum, also reducing the available fuel around the world.
How does it affect our daily lives?
The increase of gasoline prices affects every single good or service that depends on this type of fuel to be done, such as delivery of food and other supplies to markets or to our houses, public transportation, entertainment, flights and vacations.
That happens because the increase of gas prices makes these goods and services more expensive to be produced: for example, the cost of a truck delivering food from the supplier for the supermarket is higher now, since the gas needs to be paid — and it will reflect on the final product in the market shelves.
In short, the gas prices are correlated to daily lives, not only in the gas stations and directly in the gas pump, but also in our routines and daily shopping.