Fuel increases, inflation and ways you can save
Gas prices will skyrocket in no time.
On Monday, Virginia’s average gas price was just under $4.00, in large part due to the Russian invasion of Ukraine. It was $3.27 last month and just $2.65 last year for regular gasoline.
Though the US has yet to impose formal sanctions on Russian gas, the threat of sanctions has pushed prices higher. The US gets only about 3 percent of its oil from Russia.
How much will gas prices go up?
Russia exports about 7 percent of the world’s crude oil, or 7 million barrels a day. It is the third largest oil producer after Saudi Arabia and the USA. Most of its oil exports go to Europe (60 percent) and 20 percent to China.
If there were a concerted global effort to impose sanctions on Russian energy, Americans could see a more drastic rise in gas prices. It could even go as high as $5.84 a gallon, according to analysts.
However, if other countries, particularly Europe, continue to buy oil from Russia, the rise in gas prices in America will not be as great.
How else will the Russian invasion of Ukraine affect the wallet?
Due to the sanctions and the war, companies are also shutting down production. Ukraine manufactures semiconductors and wiring systems used in cars. Russia is a major producer of palladium, which is used to reduce auto emissions.
As a result, auto production could be cut by millions this year. Shortly after Russia began attacking Ukraine, BMW and Volkswagen closed a handful of factories in Europe due to parts shortages.
Russia is also a big importer of wheat, so consumers may see an increase in products like pasta, bread and cereal. However, since the US also exports more wheat and corn than it imports, consumers may not have to bear the cost.
For now, some analysts say it’s too early to say how much it will affect prices.
“I wouldn’t expect food prices to suddenly go up now because of these moves,” economist Andrew Hunter told CNBC. “If they are maintained, you could potentially see this in the coming months.”
What can you do to save?
Right now, you probably need to plan your travels more carefully. Rather than making multiple trips to the grocery store, shop in bulk and try to do your errands in one go. You can also use this gas tracker to find out which gas stations near you have the lowest price. Starting at 7am Monday morning, Teal at the corner of S. Crater Rd. and Etheridge Dr. offers gasoline for $3.79 per gallon.
Typically, Costco also offers lower gas prices than most if you have a membership.
Some gas companies like Shell and BP offer $0.05 per gallon with the rewards credit card. With the Citi Premier Mastercard, you can earn three points for every dollar you spend at the pump.
Joyce Chu is the Social Justice Watchdog Reporter for The Progress Index. Reach out to her at [email protected] or on Twitter @joyce_speaks.