I never really cared about fuel prices. They could go "up or down", but they didn't seem to affect me in any way. An incident fueled my realization. My dad had to go to a location in Abu Dhabi 200kms from our home for work 5 days. Instead of driving back and forth, my mother told him to just stay at a hotel. I thought to myself "Fuel wasn't more expensive than staying at a hotel was it?" It was.
Why are gas prices increasing?
High demand for crude oil and low supply are pushing gas prices upward. And though the US Federal Reserve has raised interest rates three times so far this year there are other factors at play internationally.
Crude oil, the resource used to produce gasoline and diesel fuel, has seen dramatic changes to its supply throughout the pandemic. When Covid-19 first hit worldwide major oil-producing companies cut back on their oil production due to isolation.
Adding to the problem, The war in Ukraine has been said to be a compounding factor in these issues. Russia, which produces about 10% of the world’s oil supply, is being sanctioned due to its invasion of Ukraine. The United States has completely banned Russian oil imports, thereby supply has been constricted which also blocks global supply.
Going forward, A union of oil-producing countries, OPEC, including Russia will increase oil production this summer. But the European embargo banning most Russian imports has already caused a bounce in oil prices as squeezed supply continues. Increased production may not be the solution to ease prices as the economic environment has become very unstable and volatile.
Therefore, the combined consequences of these scenarios mean sky-high gas prices are being implemented worldwide.
How is this affecting the life of people in LEDC and developed nations altogether?
High gasoline prices are impacting all drivers, but low-income households take the brunt of it. That's because low earners funnel a bigger share of their income into transportation and other staples, like food and rent relative to wealthier households.
However, Developing countries subsidies Fossil Fuel Use, Artificially Lowering Prices. The International Energy Agency annually estimates global fossil fuel consumption that measures what many developing countries spend, to provide below-market cost fuel to their citizens.
Could prices get any higher?
The United Arab Emirates increased petrol prices for the fifth time this year, further widening a gap with other oil producers in the region who subsidize the cost of fuel. Gasoline prices in the Gulf nation, OPEC's third-largest producer, have jumped about 80% since the start of the year amid a surge in oil prices. Due to the scarcity of gas worldwide, gas prices have escalated rapidly. If supply does not increase we could be paying more for gas than we are now in the upcoming months.
This also affects people like me, a teenager legally unable to drive. My favorite long drives in winter could reduce and transport could increase. As transportation costs increase, it is to be seen whether the cost of goods around us will increase as well or not.
Have people made any lifestyle changes?
UAE residents are resorting to practical and resourceful ways to save on fuel costs. Carpooling, public transport, bicycles and e-scooters are some of the readily available alternatives which they have begun embracing. A few are even ready to work from home.
Personal Trainer and Yoga Instructor, Varsha Lohia explained:
“With the gas prices increasing every month it's honestly getting very tough to keep up with it since I can't keep increasing my Personal Training session charges every month. I also can't afford to utilize public transport as most of my sessions are consecutive, leaving me not a single minute spare.”
In spite of increasing fuel prices vaporizing some of the profit margins it has had a positive impact as well.
Vapors are given off when gasoline evaporates. These substances produced carbon monoxide, nitrogen oxides and unburned hydrocarbons contributing vastly to air pollution. So, Although fuel prices are skyrocketing, the silver lining is that the environment gets a chance to recover. This is a hard judgment as the world we live in is being compromised for time and efficiency. So maybe the increasing fuel prices aren't too bad?
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Very well written!
An excellent analysis of an international situation by a teenager. Bravado budding journalist.
very informational, nicely summed up