Barely a day goes by without a news story about the high cost of gasoline and energy prices in general.
Economists and energy market experts point to a host of reasons as to why the market prices for oil and natural gas have skyrocketed in the past three months. The war in Ukraine only exacerbated what in any event would have been a world-wide energy crisis thanks to the decision by the OPEC+ nations and U.S. oil companies to limit output — in order to reap huge profits for their shareholders — despite increased world-wide demand in the aftermath of the pandemic.
However, whatever the reasons may be, they are of little consolation to Americans who must drive a car every day and who face record-high prices of more than $5.00 per gallon for regular gasoline.
It often is said by economists that higher energy prices effectively are a tax on consumers. But higher energy costs are even worse than a tax. We’re paying higher gasoline prices for the exact same product, but with higher taxes, at least in theory we’d be getting more services for our tax dollars.
The only ones directly benefiting from higher energy prices are the shareholders of the major oil companies and the dictators in places like Saudi Arabia and Russia.
But as painful as higher energy costs are right now, the real crunch will come this winter, when Americans in the northern half of the country will face costs for heating oil and natural gas that never have been seen. We paid $3.00 for a gallon of heating oil this past winter — but the price right now from our heating oil dealer is nearly $6.00. At that price, a delivery of heating oil of 175 gallons — about 2/3 of a tank — will be more than $1000, a figure that truly will be a hardship for many of us.
So let’s start praying now for a mild winter — and get used to the idea of taking shorter hot showers, dropping the thermostats in our homes, wearing sweaters during the day, using extra blankets at night, and sealing up the drafts through our doors and windows.