Pull-Ups or gas? How inflation and sanctions play out day to day.
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Sarah Matusek Staff writer
| Denver
In response to Russia’s invasion of Ukraine, President Joe Biden announced March 8 that the United States would ban all Russian oil, which led to a spike in gas prices. Yet early March polls show roughly half to 79% of Americans are willing to shoulder higher fuel costs for the sake of sanctions, despite annual inflation reaching its highest point in four decades.
Fluctuating fuel costs set back consumers in other ways as well. This month Uber, Lyft, and Instacart announced the introduction of temporary fuel surcharges. In Los Angeles, food truck owner John Ou is tacking on fuel surcharges to catering gigs.
Why We Wrote This
Families already squeezed by inflation are now facing higher gas prices partly due to a ban on oil imports from Russia. Despite that, many Americans are willing to make that additional sacrifice in support of Ukraine.
“We’re getting clobbered on the supply chain, we’re getting clobbered on food costs, on materials costs, and now on gas prices,” he says.
Across the country, in northeast Washington, D.C., LaToya Francis has watched inflation stretch her budget for several months.
“It’s everything from bread to milk to a pack of chicken wings,” says the certified nursing assistant. “I’m literally torn between Pull-Ups and gas on a weekly basis.”
Despite this frustration, she explains her support for President Biden’s sanctions against Russia in a text: “I wish there was more we could do without triggering a world war.”
Despite Americans’ widespread support for sanctions against Russia, sticker shock at the pump has burdened consumers already shouldering 40-year-high inflation. For those just trying to get by, it’s yet another test of patience.
“It’s tight out here, man,” says Kendall Billips at a Denver gas station a week ago, filling up his red van with $4.70-a-gallon premium gas. His nearby toddler clutches a doll.
Fuel aside, a month’s worth of food to feed their family of six cost $300 before the pandemic, but now $700 or more, says his wife, Carlissa Barrott. That’s made them cut down on snacks, despite protestations from their kids.
Why We Wrote This
Families already squeezed by inflation are now facing higher gas prices partly due to a ban on oil imports from Russia. Despite that, many Americans are willing to make that additional sacrifice in support of Ukraine.
“I got to deal with the pouting and the crying,” she says.
Still, she supports sanctions against Russia, “because what Putin’s doing is unnecessary.”
Politics at the pump
In response to Russia’s invasion of Ukraine, President Joe Biden announced March 8 that the United States would ban all Russian oil. Though Russia provided less than a tenth of all crude oil and petroleum products imported to the U.S. last year, it’s a top global exporter, and when demand overtakes supply the price per barrel tends to increase.
Early March polls show roughly half to 79% of Americans are willing to shoulder higher fuel costs caused by sanctions. That’s despite annual inflation reaching 7.9%, the highest in four decades.
Yet the Feb. 24 invasion of Ukraine only partly explains why recent trips to the gas station are stressing wallets. Between February 2021 and February 2022 – as states reopened and demand for travel grew – gasoline costs leaped 38%.
Beyond the price of crude oil, variables like state taxes and transportation costs make for a patchwork of gas prices across the country. Nationally, the average price of regular gas stands at $4.24 per gallon, down from a record $4.33 on March 11, according to AAA. Adjusted for inflation, however, that mid-March peak still hasn’t topped a July 2008 high that would cost around $5.30 a gallon in today’s dollars.
Even though oil prices have dipped from recent highs, energy experts note there’s typically a lag between falling oil prices and what drivers pay.
“When the price of crude goes up, those increases are almost immediately reflected in gas prices,” said Ellen Edmonds, AAA public relations manager, in an email. “However, when the price of crude goes down, it takes a little longer for consumers to see those savings.”
For temporary relief, some states are considering gas tax holidays, which Maryland and Georgia have recently enacted. And while some governors and lawmakers are calling to pause the federal gasoline tax – 18 cents a gallon – consumers would save more from the state level as those taxes are generally higher, says Shon Hiatt, associate professor at the University of Southern California Marshall School of Business.
“The hope of doing these gas holidays is to get through what they think could be the worst,” says Professor Hiatt, noting that sizable state revenue surpluses make the tax cuts more manageable. “The big question is will prices settle down.”
Gas versus diapers
Fluctuating fuel costs set back consumers in additional ways. This month Uber, Lyft, and Instacart announced the introduction of temporary fuel surcharges. In Los Angeles, food truck owner John Ou is tacking on fuel surcharges to catering gigs.
The owner of The Fix on Wheels, known for its burgers, says he’s increasing a 15% service fee to 20% to offset the expense of driving. Mr. Ou says he didn’t make the decision lightly – he’d already upped the price of menu items in 2021 to keep pace with rising costs of materials and ingredients. A box of latex gloves that cost him $4 pre-pandemic now sets him back $12, for example.
“We’re getting clobbered on the supply chain, we’re getting clobbered on food costs, on materials costs, and now on gas prices,” says Mr. Ou.
Mr. Ou says he’s frustrated by high pump prices in California, which at some gas stations this month have surpassed $6. And he resists the either-or assumption that complaining about gas prices suggests he doesn’t care about Ukraine. He says he backs the sanctions to some extent, while also acknowledging that they hurt “otherwise innocent” Russians. But “that doesn’t mean I can’t complain or I’m insensitive to the Ukrainian plight when I’m being clobbered,” he adds.
Soaring inflation triggered the raising of interest rates by the Federal Reserve this month, the first increase since the pandemic began. The move is a “double-edged sword,” says Carly Urban, associate professor of economics at Montana State University. The attempt to reduce demand and rein in prices also means higher interest rates for lower-income consumers, who purchase more things on credit, she says. These Americans are already considered hardest hit by inflation overall.
In northeast Washington, D.C., LaToya Francis has watched inflation stretch her budget for several months.
“It’s everything from bread to milk to a pack of chicken wings,” says the certified nursing assistant. “I’m literally torn between Pull-Ups and gas on a weekly basis.”
While raising a preteen and toddler, she says steep prices have made it harder to save, further delaying her dream of a nursing degree. The front-line worker has been outspoken about raising wages for direct care workers like herself, whose grueling work environments are stressed by staffing shortages.
Ms. Francis says she sometimes augments her full-time job at a nursing home with shifts as a home health aide in Virginia, but that’s a two-hour drive round trip. In an early March interview, she wondered how much longer she could keep either job due to gas.
Three weeks later, Ms. Francis says she still can’t afford to fully fill her tank. Despite this frustration, she explains her support for President Biden’s sanctions against Russia in a text: “I wish there was more we could do without triggering a world war.”
