Why did gas prices go up? Because %&#* happens (Op-ed)

By Ed Fitzgerald (op-ed) March 09, 2021 498

Let’s be clear from the start. Gas prices didn’t go up because of random %&#*. Gas prices went up because of capitalism %&#*  and we all love capitalism. Right? I don’t even have to ask.

The timing of the gas hikes, so soon after the seating of a new president, set many tongues a-wagging. Naturally, it must be Joe Biden’s fault. After all, on his first day in office, Biden halted construction on the Keystone XL oil pipeline in Canada.

The 1,700-mile pipeline was intended to carry 800,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through several U.S. states.

“The permit is hereby revoked,” said Biden’s executive order. “Leaving the pipeline permit in place would not be consistent with my administration’s economic and climate imperatives.”

Keystone officials estimated the move would eliminate 1,000 jobs.  

The average price of a gallon of gas in the United States, as of last week, was $2.76, up almost 30 cents from a month ago, according to the website Gas Buddy. At the start of 2021, gas cost an average of $2.36 per gallon, and prices have increased each month.

Why did this happen to a bunch of nice people like us? The short and boring answer is that the price of oil went up, so gas followed. But let’s turn over some stones.

One of the tenets of capitalism is supply and demand. In theory, the price of gas went down last year because it was not in demand. Consumers were under house arrest and couldn’t drive anywhere. Well, we could’ve driven anywhere we wanted, but once we got there we couldn’t get out of the car.

Saudi Arabia pushed OPEC to Extend Oil Production Cuts in the pandemic.

Now that COVID restrictions are easing, gas is back in demand, so the prices went up. The only problem is that demand won’t really go up until June with the beginning of the travel season. But, as any capitalist will tell you, why wait when it comes to making money. Businessmen are always looking for a reason to raise the prices of their products and the changing of the guard at the White House might’ve been just the ticket for OPEC and the oil companies.

Or how about this not-so-fantastic possibility. Maybe gas prices went up because General Motors, one of the biggest vehicle manufacturers in the known universe, announced that by the year 2035 it would build nothing but electric vehicles. Oilmen certainly took note of GM’s announcement and perhaps decided they only have 14 years remaining to gouge people at the pump, so they’d better get at it.

Many of you are old enough to remember the “oil shortages” of the 1970s. We know now, 50 years of driving giant pickups later, there was never a shortage of oil. There was a shortage of refined gas caused by OPEC leaders cutting the production of oil. OPEC sheiks said they quadrupled the price of a barrel of oil because they did not like the United States’ ties to Israel. Or maybe our foreign policy was a convenient reason for OPEC to enrich itself. Americans aren’t the only ones proficient in capitalism.

Last week, OPEC leaders agreed not to increase the level of oil production through April, except for in Russia and Kazakhstan.

But the recent hikes in gas prices are likely the result of something OPEC did almost a year ago. Last April, OPEC agreed to cut 10 million barrels per day of oil production. The extension of these cuts is the reason Gas Buddy expects prices to reach  $3 per gallon by Memorial Day.

And guess what, after being locked inside our houses for the last year, we will gladly guzzle some gas even if the price is $3 a gallon. Heck, I’m ready to drive somewhere if gas cost $4 or $5, like it does in Europe. Gas prices are going up here in America because, if you’ll forgive a little OPEC humor, they have us over the barrel.

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Last modified on Thursday, 11 March 2021 12:54