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Why are gas prices so high?

Gas prices have reached astronomical heights. Although the average has fallen slightly to $4.24 per gallon for regular unleaded gasoline from its all-time high of $4.33, it’s still about 70% higher than it was a while ago. a year.

Rising gas prices are usually linked to geopolitical events (i.e. Russia’s invasion of Ukraine). The United States banned imports of Russian oil, as well as liquefied natural gas and coal, on March 8. Although most Russian oil is destined for Europe and Asia, the price of oil is set on a global market. Total oil supply has decreased due to sanctions against Russia, but demand has remained the same, leading to gas costs over $7 at some L.A. stations.

How long will this still last?

Gas prices aren’t going to drop anytime soon. Energy Intelligence research director Abhi Rajendran predicts that they could decrease by the third quarter of this year if “there is a path to a resolution of the situation between Russia and Ukraine, plus a Iran nuclear deal”.

“The other factor that could drive prices down is [if] the world tipped into a recession which ultimately drove down oil prices,” Rajendran said.

But to really bring prices down, there needs to be more supply to meet demand, which Rajendran says “is unlikely to materially happen in 2022, and more possible in 2023.” It wouldn’t be great either, given that the only way to mitigate climate change is to reduce dependence on oil and gas, not increase supply. (And recent research shows that we need to reduce production as soon as possible.)

Over the next few weeks, gasoline prices are likely to remain the same or slightly higher and could reach a national average of $4.50 per gallon in the coming months, Rajendran said.

Why are the prices of electric vehicles also increasing?

Gas isn’t the only thing that has become expensive. The electric vehicle industry is going through a tough time with inflation and the cost of materials.

For Tesla, inflation is the main problem. Tesla raised its prices — twice. The company recently hiked prices across its entire line of electric vehicles by between 5% and 10%, which bumped the price of its lowest-priced car from $44,990 to $46,990. “Tesla and SpaceX are seeing significant recent inflationary pressure in commodities and logistics,” Elon Musk tweeted recently.

Rivian also had to raise prices, which did not please customers. The company raised prices by more than $12,000 and then quickly reversed the trend, at least for reservation holders, after a flurry of backlash from customers. Rivian executives said they had to raise prices due to inflation and the cost of materials.

One such material is nickel, which is essential to the production of batteries for electric vehicles and has had a rollercoaster ride this month. Sanctions on Russia, which is a massive supplier of nickel, are behind the immediate price spike, but the problem has also been slow to arise. The move towards renewable energy and clean energy technologies is also causing a shortage of supply.

How do high gas prices affect delivery services?

Uber, Lyft, and other ride-sharing and delivery services are trying to make it easier for drivers to pay for gas by adding fees to rides and offering cash back to drivers. Response from drivers was decidedly mixed.

Uber and Lyft have added surcharges for car trips that will go straight into drivers’ wallets, and Uber is specifically encouraging drivers to switch to electric vehicles (as if it were that easy). Instacart followed soon after, adding an additional 40 cents to each order. Separately, Lyft and DoorDash provide drivers with cards that offer cash back on gas.

Some workers believe that surcharges are not enough. A petition on coworker.org is urging delivery companies to charge customers even more for rides and companies to pocket less money on fares. “Gasoline prices are driving us out of the carpooling industry. We need a rate increase! indicates the petition.

Meanwhile, Amazon Flex drivers want the company to do something, anything to offset gas prices. The drivers – who are independent contractors who work for Amazon through an app – rallied last week to demand that Amazon track Uber, Lyft and others to help pay for gas.

What are governments doing to combat high gasoline prices?

In California, where gas prices have topped $7 a gallon in some places, Governor Gavin Newsom has proposed a relief package that includes $9 billion in direct payments to car owners — including those who drive vehicles. electric – as well as $750 million free or reduced. public transit subsidies. Under the gas price relief program, car owners would receive a rebate of $400 per registered vehicle (up to two cars per person) starting in July.

Nationally, House Democrats have suggested financial aid for struggling Americans, but the proposals have reportedly gone nowhere in Congress and a program similar to California’s is unlikely to pass.

Meanwhile, President Biden is reportedly considering various ways to lower gas prices at the pump, including a gas tax waiver and consumer rebates.

“The president and our national security team and our economic team are working overtime right now to assess and consider a range of national options,” White House press secretary Jen Psaki said this week.

What are the climate technology solutions to high gas prices?

The best way to beat high gas prices is to use less — or none — in the first place. These solutions are going to sound awfully familiar if you’ve thought about how to deal with the climate crisis (and really, who isn’t these days?). The good news is that the world has a lot of the technology we need to stop wasting money on gas. The bad news isn’t that they’re all easy to operate. And some are getting more expensive due to supply chain issues.

For most of us, filling up at the pump is the most obvious problem. It therefore follows that electric vehicles are among the most effective means of coping with high gas prices, with hybrids coming second. The catch is that electric vehicles have become a hot ticket, and the aforementioned price spikes. Not ideal! If only there was a proposal, a policy that included tax credits to make electric vehicles more affordable that Congress could pass…