The Magazine for Asian Investors
Gasoline prices are a huge headache for consumers also because, after the outbreak of the COVID pandemic, prices have virtually gone from the cellar to the sky. But why is it that prices at the pump continue to rise, although oil prices have remained just above $100 a barrel for weeks?
Gasoline prices have risen in the U.S. compared to the previous year by almost 60%. At the beginning of the year, the price in the U.S. per gallon was $3.216 whereas now it stands at $4.979. In the short term, it had also risen above $5 per gallon.
The same picture is reflected globally where in most countries of the world prices have soared since mid-2020.
With certainty, some will now think of the war in Ukraine which the politicians are all too happy to push as a pretext for rising gasoline prices. Whereby here especially the sanctions come to the fore because countries that do not participate in the sanctions continue to buy Russian oil and refinery products. So the sanctions hurt mainly the countries that impose them and less the Russians.
The price cap on a commodity like crude oil that is now being put forward makes just as little sense as the sanctions before it. If a price cap is really supposed to work, why hasn’t it been imposed on Iran or Venezuela before? It should also be questionable why Moscow sells its oil from countries that have imposed sanctions on Russia with a price cap from these countries.
With this background, the political side should now also be considered. Who has listened carefully could hear that the political elite probably like to see high gasoline prices.
Back in May, U.S. President Biden said, “Here’s the situation. And when it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger and the world will be stronger and less reliant on fossil fuels when this is over.”
Now last week, Biden adviser Brian Deese said after being asked by CNN reporters, “What do you say to those families that say, ‘listen, we can’t afford to pay $4.85 a gallon for months, if not years?” Deese replied, “This is about the future of the Liberal World Order and we have to stand firm.”
It is still the green plan that President Biden is pushing and trying to push through. The people who have to pay the price are the consumers. Even Biden made that clear again this week after he was asked how long it should be fair for American drivers and drivers around the world to pay the premium on gasoline prices. Biden answered clearly, “As long as it takes, so Russia cannot, in fact, defeat Ukraine and move beyond Ukraine.”
That’s why, despite all the price hysteria, we should also listen carefully to why prices at the pump remain high. Politicians are speaking plainly and pointing out precisely that high fuel prices are a building block for the green agenda. Consumers and citizens should watch this closely.