Gas prices in Highland Park on the night of 3/24/2022
On February 24th of 2022, Russia launched a “special operation” that, according to Russian state media, served to “demilitarize and de-Nazify” the country of Ukraine. This special operation began in the early hours of the morning with heavy bombardment and then, the still ongoing attempted annexation of the country. The effects of such a barbaric war are horrific; the UN reported that as of May 27th, there have been 8,766 civilian casualties. Although the reverberations of the war will be the worst in Ukraine, there have been some downstream effects on the international community. These problems, although small when compared to those that Ukrainians are facing, have had a profound effect on said communities.
In 2021, the United States imported almost 700,000 b/d of crude oil and refined petroleum from Russia. Russia accounts for 10 percent of global petroleum production, and on a typical day, it produces around 10 million barrels (mb/d). Data suggests that this 10 mb/d has dropped to 3 mb/d, a fall of almost 70% since the invasion of Ukraine. Additionally, as of March 8th, an Executive Order published by the White House has been put in place effectively banning the import of Russian energy. This, combined with an overall decrease in oil production, means that we will continue to see high oil prices in the United States. In Los Angeles, the reported average price of oil at the time was $6.165 per gallon. Due to such dramatic increases in oil prices and decreases in supply, it is expected that many people will struggle with adjusting their budgets to cover this price shift.
In response to the spike in gas prices, lawmakers in Sacramento have proposed to issue every California taxpayer a $400 rebate to mitigate any financial strain they may be experiencing. Although this rebate may be a good short-term solution, the future is still unclear. Similar to the way war is unpredictable, it is difficult to say what the long term effects of increased oil prices may be. Some speculate that more people will buy electric cars in response to the gas price increases. Although we are too early into this situation to have any solid data on electric car sales, it would seem like this is plausible. Assuming that this situation puts more electric vehicles on the road, this would be a big step towards independence from oil and further sustainability in California.
In order to help people cover the ever increasing price of gas, some action has been taken on both the state and federal level. Firstly, one the state level in California a bill was proposed that would provide eligible individuals with a gas rebate every month. The idea is that this rebate would help people cover their monthly gas expenditures. Unfortunately, little action has been taken on this bill and it is seeing very little movement in the process of approval. Finally, on the federal level oil reserves have been opened up for use. In the short term this briefly lowered the price of gas but as we can see the price has started climbing back up. This leaves the question standing, what more action might the government take to reduce gas prices?
