THE EFFECTS OF THE GLOBAL RISE OF GAS PRICES
All over the world, there has been a major increase in the price of gas. Like many things in life, there are many pros and cons in this given situation.
Oil companies are benefiting greatly from the global increase in gas prices. As of now, oil companies are making more money. Exxon Mobil said this week that its profits since January 2022 could total $11 billion, which is the most the company has made in a very long time. The major international increase of the price of gas has put various oil companies at a big advantage, allowing them to earn more money than they have in almost a decade.
While rising gas prices may benefit oil companies, it greatly disadvantages the average consumer of gas. Gas prices have risen more than 20% in early March, increasing prices by 50% from one year ago. Across the United States, the national average for a gallon of gas is currently $4.19. Gas prices have increased to their highest amount in 40 years. Many people are upset by this rapid inflation, and are eagerly awaiting a price drop back to the previous price.
Many people are wondering what the direct cause of the hike in gas prices is. Opinions explaining increased gas prices include: COVID-19, Russia’s invasion of Ukraine, and supply and demand. Gas prices are directly related to supply and demand, meaning that when there is more supply (in this situation, the gas) than demand, the gas will be cheaper. Alternatively, if there is more demand than supply, gas prices will spike due to the lack of that supply. Currently, demand levels are returning to normal in a lot of the world as the pandemic calms down. However, if Russia continues its aggression towards Ukraine, oil prices will probably remain elevated. But that may be Putin’s goal, seeing that Russia mainly leans on petroleum exports for its budget; this will show that Russia’s invasion of Ukraine is contributing to the increase of gas prices throughout the world. However, once the aggression calms down, gas prices will most likely decrease.
Overall, there has been an international increase in gas prices, which negatively affects everybody who owns a gas-powered vehicle. While oil companies are benefiting from the increased profit due to elevated gas prices, the average person is suffering.
“Rising Gas Prices Are Making Remote Work Even More.” Www.cbsnews.com, www.cbsnews.com/news/gas-prices-return-to-office/.
Karni, Annie, and Clifford Krauss. “Blamed for High Gas Prices, Oil Executives Defend Themselves at a House Hearing.” The New York Times, 6 Apr. 2022, www.nytimes.com/2022/04/06/business/energy-environment/gas-prices-executives-congress.html.
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