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Monday, November 29, 2021
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Gas prices hits all-time high in U.S. as economy struggles to rebound

The prices of domestic energy sources such as natural gas in the United States have been skyrocketing recently as the cost of gasoline hits a record high, affecting the country’s economic recovery.

Experts have said that the surging energy prices will likely exacerbate the fear of inflation as a number of residents have commented that prices in general have been rising lately.

The price of premium gasoline has jumped to as high as 8.5 dollars per gallon at several remote towns in California, according to reports.

Average gas prices in Los Angeles hit 4.5 dollars per gallon, reaching a record high since October 2012. Long lines have been seen at the relatively low-priced gas stations.

“It is actually a really big problem, because gas prices are four dollars now. If somebody makes about ten dollars an hour, it’s a big problem for them to refill their gas tanks, because it’s like 60, 65 dollars. But the prices have been going up day by day, even like gas and even groceries and everything, the prices are skyrocketing,” said Arman, a resident.

“It’s crazy, because for me it takes to fill up my car 60 dollars every week. Before, it used to be 40,” said Larry, another local resident.

Experts have explained that after the global outbreak of COVID-19, the production cutting deal reached among the OPEC and other oil producing countries led to a quick reduction in the global oil storage.

At the same time, the crude oil production in the U.S. was influenced by Hurricane Eta in August, in addition to the oil and gas enterprises in the country having doubt on stepping up on drilling exploitation, all of which caused the sluggish growth of crude oil supply.

U.S. President Joe Biden said on Thursday that the gasoline prices are expected to start falling in 2022. He blamed OPEC for suppressing the supply, which led to a surge in domestic oil prices. However, some U.S. experts pointed out that the U.S. government is to blame for the crisis.

“The United States is contributing to the shortage by not allowing a lot of fracking, by not allowing the building of pipelines, so it restricts the supply. If you restrict the supply, prices will be going up. So, the United States does its part. It’s not the overall most important part,” said Yossi Sheffi, director of the MIT Center for Transportation and Logistics.

In addition, the price of natural gas has nearly doubled over the past six months in the country, and households heating their homes with natural gas are expected to pay about 30 percent more in the coming winter than they did last year, particularly in the Midwest where heating bills are expected to rise by 49 percent, said the administration, predicting that it will be the “most expensive winter” for U.S. gas consumers since 2009.

However, meteorologists have predicted that the coming winter will be colder than that of last year. Therefore, the cost of heating is bound to be higher than predicted, making it unaffordable for more American households.

“I’m a little worried, but just dress warm and don’t turn the air heat on as much. I don’t know,” said Peter, a local.

“You are paying more. I mean even getting an apartment now is like more than what it was two years back. You are paying five or six hundred dollars extra. So, I don’t know how long it will go on with the problem,” said Arman.

Experts predict that the country can not shake off pressure from higher energy prices until the bottlenecks on the supply chain, global storage of oil, natural gas and coal are relieved. Meanwhile, the rising energy prices may continue to push up inflation in the United States, and curb consumer spending on other products and services and will ultimately slow down the economic recovery.

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