Local Motorists Face High and Rising Gas Prices | Business
Motorists nationwide are paying the highest average gasoline prices ever.
Friday, AAA reported that the average national price for a gallon of gasoline was $4.33. In Illinois, the average gallon costs $4.57. Cook County adds 6 cents per gallon and Chicago 8 cents per gallon: The cheapest gasoline in Hyde Park has been reliably $5 per gallon for the past week. (It’s a little cheaper in Washington Park and at stations near the Dan Ryan.)
The Associated Press Noted that gas prices were rising long before Russia invaded Ukraine, but the price has skyrocketed since the start of the war. March 8, President Joe Biden has banned the import of Russian oil to further cripple this country’s economy and acknowledged that Americans will bear the costs of “defending freedom” by not “subsidizing Putin’s war”.
A woman filling up the tank summed up the general consensus among motorists in the neighborhood on the price of gasoline in two words: “It sucks.
“What’s happening is we’ve had this massive disruption in the global oil market,” said Dr. Ryan Kellogg, an energy economics expert at the University of Chicago’s Harris School of Public Policy. , a research associate at the National Bureau for Economic Research in Cambridge, Massachusetts, and, prior to his academic career, an engineer and economic analyst for BP in Houston and Anchorage, Alaska.
“It’s really important to remember, when you think about gasoline prices in the United States, that the oil market that we participate in is global,” he continued. “So even though the United States produces a lot of crude oil itself, we still import oil from many countries at the same time as we export crude oil to other countries because we are intimately connected to the global market. Marlet.”
Everything is linked: when crude oil prices increase, the prices of gasoline, diesel, jet fuel and everything linked to the world price increase, despite the level of national production, which is reflected in the prices premises at the pump.
Kellogg said the best way to think about the future of gas prices is to realize that the situation is inherently volatile: it could decline soon or rise further.
“I think anyone who says they have a very strong opinion on whether oil prices will go up or down and when will that happen is massively overconfident,” he said. “If there’s anything we’ve learned from the history of oil markets, it’s that prices are very difficult to predict, even more so at times like this.”
During the oil crises of the 1970s, there were gasoline price controls and gas stations rationed the amount customers could buy. This is not currently the case and prices are increasing with demand.
Some people will have the financial capacity to absorb rising gas prices, others will have to change their behavior. Some people like Amber O’Quinn are lucky enough to live within walking distance of her job. She recently moved here from Utah with her partner, a University of Chicago student, and specifically chose a home within walking distance of work.
Compared to Logan, Utah, a college town adjacent to the Bear River Range 80 miles north of Salt Lake City, Hyde Park and Chicago are flat and have relatively good cycling infrastructure. As she filled up with gas, she said she expected to cycle more to get around the city given the rising prices.
“I’m really cost conscious because I come from poverty,” she said. “I know how important numbers are, but people who have kids might not have that ability. They just won’t have that flexibility.”
Eric May hasn’t had a car for 40 years; he said his needs are met by public transit and his feet.
“(The CTA) kept the prices down throughout the pandemic, even when you saw buses with hardly anyone on board. And they kept the prices reasonable,” he said. “Of course I’m 68. I remember when you could get on the ‘L’ for like 25 cents. So for me that’s no problem.”
He sympathized with people who have to drive to work and assumes prices will go up, but he also noted that the rest of the world has long paid high gas prices.
“What are you going to do?” he said. “We’re in a global market, and that’s what the market will bear. It’s all about supply and demand. And right now, demand is high and supply is low. So that’s what And it’s not like there’s a government policy you’re going to be able to do that by saying “we’re going to do it now and the prices are going to come down.”
“I understand people’s frustration because it’s part of all the inflation eating away at people’s wallets. But at the same time, what are you going to do about it? I remember back in the 70s when the OPEC decided it was going to cut oil prices to raise gas prices, and there were gas lines.Things weren’t so bad yet.
Bonnie Fields, who drives, said she thinks fueling up at Costco would help a bit. In her late 70s and in retirement, she said the decision to drive or walk for neighborhood errands depended on the task. For several bags of groceries, she drove; for a few items it would work.
“It’s going to be crazy,” she said of the price spike. “I don’t think I can change much in my habits. When I go to town, I never drive. I always take the Metra. the north side. And we go Uber.
“All those people who decided to have SUVs and trucks because they didn’t think gasoline was going to come up, they’re going to find out,” she said. “Being older, we know things go up and down, and you can’t say it’s never going to go up.”
Kellogg, Professor Harris, said rapid price increases were hitting people of limited means who are heavily dependent on cars very badly.
“It’s very difficult to change your lifestyle from relying on this transportation in a matter of weeks,” he said. “You just can’t do it. You can’t change where you live, where your kids have to go to school, where you have to go to work. You have to live your life and try to avoid driving yourself getting around in such a short time is really, really hard to do.”
By the time a fuel price crisis hits, he said, it’s already too late for people to tackle it. They are already locked in and this is causing serious financial hardship for some people.
Similar situations can occur from massive spikes in heating or cooling costs or increases in rent or property taxes. Some households will have to drastically reduce their spending, whether in food or health or discretionary spending: toys, Netflix, etc.
Chicago has at least one public transit system; Kellogg said improving COVID-19 conditions could lead to increased usage. And its climate and geography are conducive to cycling.
As a European, Liina Raud is used to high petrol prices. She is, however, somewhat resentful of paying them in the United States.
“It is what it is, but I’m on a budget,” she said. “I’m a student, so I’m a little worried.”
Right now she fills $20 at a time instead of the whole tank. She said she didn’t buy expensive clothes.
Raud, who has lived in the United States for five years, has friends in Estonia who currently store gasoline. The Soviet Union annexed the country in 1940. Estonia is now part of NATO; Relations between Estonia and Russia are currently tense.
“I don’t know where they would go, because there’s the sea and then there’s Russia and then there’s Latvia,” said Raud, another country annexed by the Soviet Union and now a member of NATO, which has strained relations with Russia. “They are ready to at least leave the capital.”
“I hope the situation will calm down and stabilize, and I hope gasoline prices will come down,” she said. “I don’t know how, but I hope it will.”
Paris Williams naturally placed rising gas prices directly in the context of the Russian invasion. He noted that some American liquor stores had stopped selling Russian vodka due to the country’s aggression; by Friday, Biden had outright banned its import alongside other “flagship sectors of the Russian economy”, such as seafood and diamonds.
The gas, however, was going to affect his wallet. “It’s terrible. Just terrible,” he said. In this time of inflation, he assumes that rents will also increase.
“What are you going to do?” he said. “Go to work, pay the bills.”
Williams drives to run errands and get to work in the southern suburbs. “One hundred percent it could go to $6 or more,” he said. “So I’m taking the bus. I don’t care. You have to leave the house early. You have to time yourself. You have to think about it like you don’t have a car.”