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Why are Gas Prices so high?
Summary
Nearly two years ago, the COVID-19 pandemic struck the United States and the rest of the world, which caused businesses and companies to shut down. The emergency enforcement of lockdowns caused many to stay home and reduce the use of vehicles for traveling, etc. The demand for gas and oil dropped drastically since nobody drove as much as they did before the pandemic. This caused many issues in the gas and oil industries, such as:
- oil prices to go low
- the lack of demand caused producers to stop drilling new wells
- laying off thousands of workers in the oil industry
It was not till recently that people started to travel as much again, and things started to come back to normal. However, the constant low demand for almost a year would take oil industries months before coming back on track. Other countries part of OPEC (largest oil-producing nations) have refused to export any oil to the U.S. because of their constant efforts to recoup from the pandemic.
Due to these constant issues faced by the government, getting gas prices back to normal has been a bother and will continue to be so for the next few months, or maybe a year.
How Does this affect the Policy World?
President Joe Biden & the U.S. Government has been under constant pressure for the past few months to help lower the gas prices. This constant pressure has led President Biden to issue policies and bills which could somehow aid the issue of gas prices and has also led states to consider options to aid that effort. Those efforts include:
- authorizing a release from the nation's strategic oil reserve to help offset the surge in gasoline prices.
- many states have considered implementing a gas tax to help surface the gas prices for a short amount of time.
- possible plans to lower the exports of gas from the united states.
- possible plans to cut environmental regulations to speed up the production of oil.
Future of this Issue
With the ongoing conflict between Russia and Ukraine, the United States has halted any talks in a possible trade between the United States and Russia in terms of oil. President Biden’s scope of possibilities is narrow when it comes to aiding the gas prices in the country. However, the Senate has been introduced many bills that can help battle this issue.
Though it is doubtful that the gas prices will go back to normal for a while, the restarting of many oil industries and companies could take the prices back down in the latter part of the year.
As many states cut taxes and provide help efforts to reduce gas prices, it is essential to keep in mind that this issue is simply a periodical issue and that gas prices will eventually go back to normal.
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