High gas prices are not just due to price gouging
As the invasion of Ukraine rages on, President Joe Biden has rightfully pointed out that Vladimir Putin’s invasion led to high gas prices in the U.S. However, Biden has oddly shifted the blame to oil companies, which he stated were guilty of price gouging. This idea contradicts his narrative, only serving to further divide the country during a time of geopolitical crisis.
Price gouging is when companies take advantage of high demand caused by significant geopolitical or national emergencies to charge high prices and generate a profit. If Biden’s original explanation for high prices was that it stemmed from the invasion of Ukraine and the lack of supply caused by the pandemic, it wouldn’t make sense to say oil companies are to be directly blamed.
If these prices are caused by the Russian invasion and following sanctions, this means oil companies struggle to keep up with demand and are forced to increase prices due to low supply in order to balance.
It’s important to note that the percentage of oil exports coming from Russia into the U.S. is significantly lower than the percentage of Russian oil entering Europe., There is a difference of 8 percent in the U.S. compared to 50 percent in Europe. Most of the American oil comes from Canada, other nations and Mexico.
However, it’s unfair to say sanctioning Russian oil doesn’t have a significant effect on gas prices. The sanctioning of Russian oil and other assets increases prices across the U.S. and it does not make sense for Biden to point the finger at oil companies to claim the raised prices are the result of price gouging.
Additionally, the price of gas had been steadily increasing since 2021.
With 2021 serving as a recovery year for most countries around the world after the start of the coronavirus pandemic, it serves to reason that it had a significant role to play in the recent high prices as well.
An accusation of price gouging with little to no evidence has serious ramifications for political partisanship. Biden’s comments accusing oil companies of price gouging only further divides Democrats and Republicans on the issue of gas prices, since Republicans typically favor oil companies more than Democrats.
This hurts any hope in trying to address and discuss the negative impacts of oil supply shortages and how to mitigate them in a productive nonpartisan manner.
It is during times of crisis that leaders need to be cognizant of the effects of their words.
President Biden’s comments regarding price gouging have only deterred any meaningful conversation from occurring on how to create an economic recovery plan following the pandemic and the Russia-Ukraine war.
JJ Caceres is a political science freshman who can be reached at [email protected]