*There’s nostalgia at the thought of paying four dollars for a gallon of gas. In fact, there’s an almost deep longing in paying five dollars for a gallon of gas. Those days seem like a thing of the far distant past with gas prices surging upward almost daily past six dollars.
There’s a multitude of stock reasons offered for the skyrocket in gas prices. Russia’s invasion of Ukraine tops the list. This supposedly sent fear and shock waves through oil producers, refiners, and investors. This sent them scurrying to jump prices and cash in on profits from fear of a global shutdown in oil production and transportation. The need for big and quick price jumps also supposedly is a measure to insulate the producers from potential revenue losses.
The other reasons cited are transportation and shipping bottlenecks, strains on refining capacity and output, and a post-COVID surge in demand for fuel products. Then there is the perennial reason–Greed.
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OPEC is a tight-knit cartel. The dozen or so OPEC members rigidly control oil prices and supply. They are subject to nothing but the whims of the market. They can raise or lower prices, raise or cut production, and thus manipulate supply and price at their discretion.
The problem as always with the eternal oil price shuffle is that someone must pay. That someone is always the poor, and low-income workers. Everything and I mean everything, is dependent on petroleum products and their derivatives. All commodities, as well as air, car, truck, or boat travel and transport is dependent on fuel. All commodities from food to hardware goods must be transported to stores and other outlets.
Retailers routinely pay more for those items, and they instantly pass their increased costs on to consumers. There are far more low-income and lower-end working consumers than wealthy consumers. A recent Wall Street estimate is that the average working-class family will pay upwards of $2000 more in costs for their needs based solely on the leap in gas prices. That estimate was made in early March. If price increases continue to surge throw that figure out the window and double the cost of goods for the average family. It gets worse. Interest rates are poised to rise. Everything from home mortgages, home refinancing, and credit card purchases will be even more costly. The poor and working-class will bear the brunt of that cost rise.
This article/essay continues at TheHutchinsonReport.com
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