Americans have been struggling in recent months when it comes to fueling their cars. Prices for a gallon of gas have increased significantly from a year ago with no relief in sight. Despite the strain on the savings of every American, Europe is also facing a crisis of dramatic proportions in trying to solve its fuel shortage, often having to pay more than those in the United States.
What has caused this rise in gas prices?
To put it bluntly, there are numerous causes as to why gas prices have been so high. One of the key reasons is the ongoing conflict between Ukraine and Russia. Due to the longstanding war, countries like the United States and those in the European Union have placed an immense amount of sanctions on Russia, as it promised to do so if the country invaded neighboring Ukraine. In addition, the strain of nations having to meet their obligations in reducing carbon emissions and high fuel demand has only added to the crisis at the pump. The United States and Europe are feeling these effects in full as a result.
How does the U.S. compare to Europe?
According to the AAA analysis of gas prices, the United States currently holds a $4.955 average per gallon of gas as of June 22nd. Compared to one year ago, the prices have increased by almost $2 with no clear end in sight. California currently sits as the state with the highest gas, averaging more than $6.00 per gallon.
However, despite the headaches of these prices, much of Europe is worse in comparison. Finland currently sits at the highest with a whopping $10 for a gallon of gas (roughly 2.50€ for one litre). The United Kingdom, Switzerland, Sweden, and France currently sit at more than $8 per gallon (more than 2€ for a litre). Germany, a country that has become dependent on Russian oil imports to fuel demand, has an average of $7.50 for a gallon (1.90 € for a litre) and is risking economic collapse as a result of consumers being unable to afford fuel.
Europe Gas Prices: U.S. Dollars for a U.S. Gallon
Europe Fuel Prices: Euros for a Litre
How do we solve this problem?
Reduce the gas tax: In both Europe and the United States, nations have committed themselves to uphold the Paris Climate Accord to phase out most of their carbon-producing outlets by 2030. With this in mind, these nations have passed numerous pieces of legislation that push the population to reduce its vehicle emissions through a “gas tax.” This method essentially puts a tax on any type of fuel when paying at the pump, effectively making gas more expensive for the consumer. Even though it does help in reducing emissions, it may help to temporarily block this tax to reduce costs and get the gas price under control. The United States, and California specifically, are considering this option.
Resolve the Russia-Ukraine conflict: solving the war between Ukraine and Russia is also paramount to reducing gas prices, as sanctioning Russian oil is the main reason for this spike at the pump. Russia is one of the largest exporters of oil for Europe, and the sanctions that have resulted from the war have been the main cause of fuel shortages. Resolving the conflict and relieving sanctions on Russian oil imports would solve this crisis as a result.
Conserving fuel: at the end of the day, the increase in gas prices is also a result of high consumer demand, with many continuously choosing to travel amid the strain on oil production. To reduce demand, one option would be for the consumer to limit buying gas. If this is accomplished, the strain on oil production would go down and prices would fall.