War, pandemic, major factors in gasoline price increase
Local residents sound off about fuel pump sticker shock
For more than a week, gas prices across Howard and surrounding counties have seen a noticeable increase.
There are numerous factors that contribute to the rise in gasoline prices. Currently, the war between Ukraine and Russia is one of the biggest factors. The disruption of the pandemic, the problems with Russia, sanctions being imposed on Russia, and the invasion of Ukraine, seem like the makings of a perfect disaster. This combination brings West Texas – as well as other areas – record high oil and gasoline prices.
Door Dasher Sam White said “It's less of a profit than I would normally make if gas prices were $1.89, so yes it's setting me back a little. I hope that it doesn't keep going up, because I would have to find a secondary income or go work in the oil field.”
Gas prices are on the rise and show no signs of lowering again any time soon. While the price increases do hurt people's wallets, it's helping regional economies in Texas and New Mexico.
“Higher oil and gas prices also correspond to higher tax revenues,” said former oil and gas employee from Big Spring David Shauna. “When oil and gas prices are high, it usually means more of a demand for workers in the oil and gas industry. It also means more revenue coming into the state. Money coming into the state the more funding for beneficial programs for our community. The more oil that we produce here in the area eventually will stabilize our gas prices...it's just going to be rough in the beginning until production hits a certain point.”
Since President Joe Biden put a ban
on Russian oil imports, Republicans, including Gov. Greg Abbot, have suggested an increase in the production in Texas that could help bring the gas prices down and help the United States become energy independent. Abbot tweeted, “Instead of begging other countries for oil, Biden can stop hindering the U.S. Energy sector. Texas can easily produce enough oil to reduce gas prices if his Administration would let us do it.”
Sean Biggs, an oil and gas worker from Halliburton, thinks that the American government is trying to force the country to go electric, which he sees as a frightening prospect for job security.
“As of now it hasn't directly hurt me, but I do think this can either go positively and create more jobs and more oil production in the states, or it could go negative and cause job loss and a much less oil production,” he said. “It's too early to tell. We just need to prepare for the worst and hope for the best...and save as much money as we can.”
An employee of Completion Rental who asked that their name not be used said smaller companies may be directly affected by the high gas prices.
“While it already cost up to $15,000 dollars to fuel the equipment used and the trucks employees drive before the spike in prices, can you imagine what the cost per month for a small company is now with this spike?” the employee asked. “We just need to be patient and do everything we can to save money in other areas of the company. I don't think this is going to be a forever thing. It will get better, but it's going to be rough for awhile. Before the pandemic production was going good and gas prices were forecast to hit record highs, the pandemic caused a lot of job loss, increased prices on food and other necessities, but the gas prices went down. So its hard to say what's going to happen. Things change every day.”
A gas delivery driver at Walmart in Big Spring said that he has been busier than normal as far as how many deliveries he does daily, but he said people seem to be in more of a panic to get the gas now before the price goes up or supplies run out altogether.
“People need to just calm down and let things happen,” he said. “It's beyond our control, so either way we have to deal with it.”
An employee of a local oil equipment rental company stated “From the company perspective, the higher the better. The higher the oil prices, the more jobs available for the economy.”
“The gas prices going up is great for the oilfield companies. I have always been told the higher they go, the better off they will be,” Big Spring Resident
Jennie Lopez said. “As for a me, it could increase business at my job, but it doesn't increase my wage.
I just have to spend more out of pocket for gas and I would need to save elsewhere. Unless Texas wages increase also, it could cause a lot of problems for low income families.”
The world has a lot of unknowns and one major thing that we are seeing happen is inflation. Inflation occurs when there's not enough goods and services to meet the demand for them. Prices for those goods and services increase.
Wages also affect the cost of production and are typically the biggest expense for a business. When the economy is performing well, and the unemployment rate is low, shortages in labor or workers can occur. Companies will then increase wages to bring in qualified candidates, causing production costs to rise for the company. If the company raises prices due to the rise in employee wages, cost-plus inflation occurs. Business owners can deliberately withhold supplies from the market, allowing prices to rise to a favorable level. Companies are at risk if they're unable to pass on the higher costs to consumers through higher prices.