Tag Archives: transportation costs

Why America Needs To Be Energy Independent

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On Thursday, The Washington Examiner reported that the Organization of Petroleum Exporting Countries (OPEC) has agreed not to increase its production of oil in October as it had planned. The price has dropped too low, and if the supply is lower, the price will go higher. It’s the basic law of supply and demand. It is also the reason America needs to be energy independent. How much money (tax revenue, lower energy costs for the government, transportation costs for oil, etc.) would we save if America was again a net exporter of oil and natural gas.

The article reports:

OPEC+ agreed to pause its planned oil output hike for October and November as prices have dropped to their lowest in months.

The oil-producing bloc revealed on Thursday that eight member countries, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, have agreed to extending cuts.

The decision reverses a planned increase in oil production to 180,000 barrels a day in October. 

The eight countries have agreed to cut production by 2.2 million barrels per day through the end of November. These cutbacks will be phased out starting Dec. 1, according to the group.

In Thursday’s announcement, the group said two of the member countries, Iraq and Kazakhstan, have been overproducing barrels since January.

The article notes:

Crude oil prices, which had fallen to the lowest levels of the year in recent days, rose in reaction to the news that the production cuts would be extended. Benchmark Brent crude was up about 0.6% late Thursday morning.

Low prices have alleviated some pressure on consumers amid rampant inflation, keeping oil and gas prices top of mind for voters ahead of the 2024 presidential election. Industry experts warned that the production increase could have caused prices to drop even further, reaching as low as $50 a barrel, Bloomberg reported. 

It would be nice to see prices stay in a range that would give consumers a break.

 

Life In America Is Getting More Expensive

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On Friday, The Daily Caller posted an article about the impact of inflation on household budgets.

The article reports:

The Consumer Price Index (CPI) reached its highest rate in over 40 years in May, adding more strain on U.S. household budgets.

American families watched as consumer prices for necessities like groceries, oil and gas, and transportation rose 8.6% in the last year, according to the Friday U.S. Bureau of Labor Statistics (BLS) report.

The CPI, which measures the change in price for products paid for by U.S. consumers, increased a startling 1% in May after only rising 0.3% in April, the BLS report shows.

The skyrocketing rates affect all areas of American life, but shelter, gasoline, and food saw the highest price increases.

The article concludes:

Records show food prices rose 1.2% in May, an increase from the .9% rise in April. The food at home index climbed for the fifth consecutive month, increasing 1.4% in May. The price for American families to eat at home has risen 11.9% over the past 12 months, making it the largest 12-month increase since April 1979, reported BLS.

“All six major grocery store food group indexes increased over the [last 12-months], with five of the six rising more than 10 percent. The index for meats, poultry, fish, and eggs increased the most, rising 14.2 percent, with the index for eggs increasing 32.2 percent,” the BLS report stated.

Fruits and vegetables rose 8.2%, with other food at home rising 12.6%.

Transportation costs, like new and used cars, and airline fares, also rose. The price of new vehicles rose 1% in May and 12.6% over the past 12-month. The used car index increased 1.8% in May and 16.1% over the past year. Airline fares rose 12.6% in May alone, after increasing 18.6% in April, statistics show.

There are a lot of reasons for this increase in inflation. There is also a belief in some circles that it is by design–inflation makes the national debt easier to pay off. Unfortunately, if the Federal Reserve raises interest rates, the interest on the debt increases dramatically. Basically, excessive government spending is a major source of inflation. The dramatic increase in fuel prices has a trickle-down impact on inflation and is also contributing to the problem. Both of these things are correctable if we had an administration that wanted to correct them.