There is no way to sugarcoat it. Banning Russian oil, natural gas and coal imports to the United States is going to raise the price of filling your car.
The war in Ukraine already has. Earlier this week, AAA placed the nationwide average price of gas at $4.17, which was an all-time high. It likely will keep rising.
President Biden on Tuesday warned oil companies not to profiteer, even as he seemed to chastise them for not taking advantage of some of their current drilling leases. We hope he wasn’t laying the groundwork for shifting blame. Market forces may provide those companies with the profit margins needed to increase their drilling, but the bulk of price increases at the pump will rest solely at the feet of the president for imposing a ban.
Which isn’t a bad thing. Biden should own that decision proudly. Cutting off Russian oil and gas was exactly the right move.
If he likes, he can share blame with oil companies that already announced they were cutting Russian ties, such as Shell. Or he can share it with McDonald’s, Starbucks, Coca-Cola and other U.S. companies that have decided to cease operations in Russia. It is the patriotic thing to do.
We urge Americans to view higher prices as an opportunity to help Ukraine by significantly weakening the Russian economy and Vladimir Putin’s ability to wage war. You will have to pay more, perhaps curtail unnecessary car trips or use mass transit when possible, but at least you do not have to flee your warm home, with children in tow, while bullets and bombs rain around you.
We urge Americans to understand how Putin, if he succeeds in occupying Ukraine, might turn his attention to NATO countries bordering Russia or Ukraine, or perhaps to non-NATO but Western-friendly, peaceful neighbors such as Finland or Sweden.
History shows that when tyrants become expansionist, freedom-loving countries eventually are forced to confront them. By doing all it can now to weaken Russia and thwart the takeover of Ukraine, the United States might be able to avoid a greater cost, in lives and economic impact, later.
The United States imports only 3% of its oil from Russia, according to the Washington Post. Still, this move will disrupt international oil markets and inevitably lead to higher prices at a time when those prices already are rising.
But Biden, in his speech Tuesday, also touched on an important, and often neglected, truth about confronting tyranny through energy. The more the United States and other countries can wean themselves from oil and turn to vehicles powered by alternative fuels, the less money tyrants in oil-rich nations will have with which to do mischief.
Despite sales increases of 76% for hybrids and 83% for electric vehicles in 2021, Motor Trend Magazine said only 5% of all cars sold were hybrids, while only 3% were electric.
Accelerating the switch to electric cars will take greater incentives, plus a sharp increase in available charging stations nationwide. Currently, the federal government will provide up to $7,000 in rebates for the purchase of electric cars and $3,500 for hybrids. But many of these models remain prohibitively expensive. Utah provides up to $15,000 in tax credits for heavy duty alternative fuel vehicles, according to the U.S. Department of Energy. Congress, meanwhile, has allocated $75 billion for vehicle charging stations, thanks to the recently passed bipartisan infrastructure bill.
These are a good start, but it will take a while for markets, and consumer preferences, to shift. Higher prices might help that movement.
Americans are among the most affluent people on earth, with a per capita gross domestic product of $63,593.44, according to worldbank.org. Many people have the capacity to withstand a little pain. Those who can afford it should be especially watchful over those who can’t, helping them with rides or in any other way.
The sanctions imposed on Russia have begun to hurt. On Tuesday, the ruble was trading at less than one penny in U.S. dollars. Hitting the Russian oil industry will make it that much harder for Putin to wage his senseless war on an innocent neighbor.
That outcome is well worth a temporary hike in gas prices.