If you’ve had to fill up your gas tank in recent months, you know the price of gas is substantial right now, to say the least. With energy experts warning that the upward trend may continue through summer, Indivisible is going in-depth on the cost of oil.
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What you need to know
- Energy prices are rising globally—especially fossil fuels. While we’re seeing significant increases in the price of gas in the United States, other countries are seeing far more severe spikes. There are multiple long-term drivers for the increase, but sanctions against the Russian petrol empire after the invasion of Ukraine have put a spotlight on supply and cost.
- The president does not set the price of gas. If only it were so easy! The price of a barrel of crude oil is determined by global supply and demand, and today supply is constrained and demand is through the roof. With profiteering corporations acting as the brokers, working people are hit the hardest and options for administrative intervention are limited—but Joe’s still trying!
- The cost of fuel will be a major election issue. 73% of voters say gas prices are a serious concern for them, and Republicans are already working hard to pin rising costs on Democrats. We know these arguments are made entirely in bad faith, but they can be effective if we don’t acknowledge the high costs we’re all bearing.
- There’s no easy fix, but there are long- and short-term remedies. The best time to kick fossil fuels was decades ago, but we’re in this situation today and we need to deal with its realities today. That means moving quickly to help working families manage the cost while laying long-term plans to build a more sustainable and stable energy economy.
Who’s impacted
Unfortunately, literally everyone is impacted. You! Me! Your ex! That old classmate from high school you haven’t talked to in years! Your kids’ teachers and your teachers’ kids! We’re all in this very expensive boat together—welcome to the party!
Yes, even people who don’t drive are feeling it too. Rising gas prices don’t just show up at the pump: the price of manufacturing and transporting goods rises along with the cost of petroleum and gasoline, meaning everything from computers to food is going to experience some upward price pressures.
Of course, working people are hit the hardest by the rising cost of fuel. Anyone who commutes to their job or who lives in rural areas where long car rides are part of daily life will see even a modest bump in gas prices result in potentially hundreds or thousands of extra dollars spent on fuel in a single year.
What’s behind the scenes
There are two main culprits behind the rising cost of gas: petrostates like Russia and Saudi Arabia, and price-gouging oil companies (and their Republican allies).
- Petrostates are countries with economies built on fossil fuel extraction and export. American reliance on fossil fuel, both domestic and imported, has helped prop up these regimes for decades and encouraged them to wield their supply as a political and economic weapon. With the invasion of Ukraine and harsh sanctions against Russian exports, President Biden is rejecting the petrostate paradigm—a choice essential for global security, but not without its costs. Russian oil supply being cut off from major markets is driving the price up dramatically, highlighting how Vladimir Putin’s violent ambitions are impacting all of us. Although we only get about 3% of our oil imports from Russia, even the loss of that small supply has a big impact. Yes, the Putin Price Hike is real.
- Oil companies have posted record profits in recent years, especially as COVID-19 travel restrictions have loosened. Chevron, ExxonMobil, BP, and Shell have all been breaking records, even prior to the invasion of Ukraine. How? Price gouging. Oil industry CEOs have been intent on keeping the price of gas high to make up for lost pandemic profits, and have gleefully passed the cost on to working families. How do we know? After the price of a barrel of crude oil spiked in February, it dropped drastically in mid-March ($123 down to under $100). Even though that should have been followed by a drop in gas prices, the corporate middle men kept the gallon price at record highs, and they’ve since continued to go up. Oil lobbyists’ deep investments in Republican politicians have protected these corporations, and the pre-election squeeze is a boon for their enablers in Congress at your expense.
Why it’s important
Gas prices are hitting Americans hard, and voters are being primed to blame climate action instead of international bad actors and price-gouging oil companies. With 73% of voters identifying gas prices as a serious issue, Republican candidates are leaning into the narrative that Democrats’ environmental regulations are pushing the price up, nevermind the fact that most of the policies they blame have never been law! If successful, our dependence on oil companies and petrostates will deepen under Republican leadership and essential progress towards a sustainable energy economy will be lost.
Beyond that, our reliance on petroleum is a security risk. As long as international bad actors with oil economies can leverage their resources to fund wars and threaten foreign markets, we won’t be
How we talk about it
- Soaring gas prices are the result of Vladimir Putin’s war and price-gouging oil companies. The invasion of Ukraine sent the global oil market spinning, and our dependence on fossil fuels means that we’re going to feel it for a while. Between Russian aggression and continued profiteering by obscenely rich oil CEOs, it’s hardly surprising that the U.S. average cost of a gallon of gas is well over $4.00 and rising.
- President Biden and congressional Democrats are taking the fight to oil companies and to Putin to help working families. Since the beginning of the invasion of Ukraine, President Biden has been clear: we will hold Russian leaders accountable for their assault on democracy. In doing so, he’s also made it clear that the U.S. won’t be cowed by the threat of weaponized oil prices. Instead, he’s worked to streamline the supply chain to ease the squeeze and has called on oil companies to answer for their gouging. Leaders in Congress are tackling the problem too—the Democratic House passed the Consumer Fuel Price Gouging Prevention Act to stop the exploitation and help working families.
- Republicans are on the side of the price-gougers. Since 2020, oil companies have contributed over $76 million to Republican candidates—and that’s not counting the millions of dollars in dark money they flood races with. Now, as they squeeze working families to pad their profits, Republicans are telling Americans to blame non-existent climate policies and President Biden. It’s no surprise that they unanimously voted against the Consumer Fuel Price Gouging Prevention Act in the House, siding with corporate profits over people. If we want real solutions to oil industry exploitation, we need to keep their enablers out of power.
- We can’t drill our way out of this. Oil companies are intent on keeping the price inflated, but even if they started drilling more in the U.S. tomorrow, it would take more than half a year before that oil hit the market. So while Republicans scream for more drilling, Democrats are offering sustainable solutions that will reduce our dependence on dangerous oil and move us to renewable, affordable, and reliable energy independence.