What are the Reasons for the Burgeoning Prices of Petrol?
When looking at the reasons for the ever-increasing prices of petrol in the United States, it is imperative to take note of a few vital factors. These factors might not seem like the direct cause to you; however, world politics is extremely complex. Nevertheless, it becomes imperative to understand why. Consumers are being asked to pay a high price for a thing that is a daily necessity for millions. Thus, without further ado, let’s have a look at these factors!
During and After the Pandemic
It is no secret that during the pandemic, millions of people were impacted for the worse. From being forced to shut down their family businesses to losing many loved ones in a low period- the pandemic caused a variety of problems for which there seemed to be no solutions. However, by the time the solution did come- the vaccine- it was too late. There can be no tag on personal losses, but even the countries suffered huge losses since the economy went down.
Therefore, even a superpower like the United States had to go through various adversities. Although it seems as if everyone has been through them and is now free, it is not so. What comes after a disaster is always worse- when people are forced to go on without their loved ones, when countries have to make constant efforts to strive forward.
Thus, the prices of petrol, an essential commodity, increased right during the pandemic as the demand for energy rose. The prices shot up instantly when many countries ceased all restrictions on international travelling. Therefore, you can say that the demand for petrol saw an all-time rise the moment the fear of the pandemic was pushed to the back. Thus, while the pandemic was still ongoing and the moment things started to look slightly better were the two major instances when the petrol prices saw an increase in its price.
High Taxes Levied by Governments
One another major cause for the rise in the price of petrol can be attributed to the taxes levied by the government. This is a direct result of the pandemic; as mentioned above, various countries suffered huge losses. And thus, to compensate for the decrease in GDP and the crushing economy, the governments of such countries were forced to increase taxes.
Moreover, the taxes were importantly increased on essential commodities such as petrol. For instance, in the United States itself, the government levied a tax of $57.09 per gallon of petrol. In other countries, where the economy was brought down to its knees and there was little hope left, the governments levied a tax amounting to 50 to 60%! Thus, when compared to such countries the price of petrol in the US might not seem that high. And although the US has seen inflation in the past few years, it is no doubt that various other countries are also constantly battling with it.
In addition to this, this can be seen as a cunning ploy of the government since the high taxes are levied not on luxury items but on essential commodities. This move by the government has also forced millions of people to make use of public transportation instead of personal vehicles.
Cold War
The most recent cause of this increase in petrol prices and making it more expensive is, undoubtedly, the ongoing cold war between Russia and Ukraine. Since Russia is a major exporter of petrol throughout the world as it has a very strong hold over the raw material- crude oil, it is obvious that it is going to sell petrol at an increased price to compensate for all the money spent on making weapons to destroy innocent lives. You must be aware that war is not a child’s plaything; a financially weak country cannot afford to go to war.
Although Russia is a strong power here, Ukraine has been compelled to fight back to protect the lives of its citizens. And although the tensions might seem slightly less now, the situation could worsen at any time. Now, since the price has already risen from the initial stage itself, i.e, Russia has decided to sell crude oil at a higher price, it is obvious that when it reaches the consumers, the cost is going to be even higher! Thus, the prices of petrol can be expected to rise even higher until the war is resolved. However, since it is still ongoing, this will only bring in more and more bad news.
When Will the Price of Petrol Decrease?
As mentioned above, the growing uncertainty is very constant and world politics is extremely complex. This question does not have a definitive answer since there seems to be no light in this dark tunnel. However, as consumers of petrol, it is no doubt that you are worried about the ever-increasing prices, not just of petrol. Nevertheless, you can do your bit to save your hard-earned money.
You make use of other transportation methods instead of commuting by car.
If your office/college is not that far off, you can always bicycle your way to work! This will help you save your money and take care of your health.
If commuting by car is a necessity for you, you can opt for carpooling. This will also save the environment along with saving your money.
Conclusion
So, now you know why is petrol this much expensive. Behind the rise in the price of any commodity, be it luxury or essential, there exist a plethora of reasons. In the case of petrol, many factors are to be blamed including the pandemic, the high taxes accompanying it, and the ongoing war. Thus, all these factors have affected the price of petrol hence it is expensive. Nevertheless, you should take precautions so that you don’t end up with an empty wallet by the end of the month.
How much tax does the US government levy on petrol?
$57.09
How can I avoid paying such a high petrol price?
You can make use of public transportation or bicycle your way to work.
