Submitted by MistWeaver80 t3_114wqdz in science
I'm no economist but the way I see it, when the supply of fuel is restricted or limited, we can either completely run out or invoke a rationing system. I'm pretty sure it would be political suicide for any western polititian to suggest war-time era fuel rationing, so it's rationed by price - supply and demand - the price goes up untill people can't afford to use it.
Governments are also making record amounts of money from the rise in fuel prices. In the UK a good chunk of what we pay at the pump is in fuel tax. At one point last year the government knocked ~5% off the fuel price to help reduce the cost of living crisis, even then they were making more money from fuel tax than before the start of the Ukraine-Russsia war due to the increased overall prices of fuel.
In my opinion, we should certainly be imposing a windfall tax on these energy companies. They've indirectly made a lot of money at the expense of millions of people's quality of life. (And thousands of people's actual lives)
>In my opinion, we should certainly be imposing a windfall tax on these energy companies.
You may find it interesting that Gazprom, Russian gas monopoly, was slapped with a windfall tax last year and ended up paying almost all of its extra profits back to the government.
Unfortunately, western governments seem to be toothless.
You mean Putin found an easy way to source some funds for his invasion of Ukraine?
Spain does/will have a windfall tax on banks and energy companies.
>. Unfortunately, western governments seem to be toothless.
How much help did oil companies get early pandemic when prices tanked to below $0?
> How much help did oil companies get early pandemic when prices tanked to below $0?
Bizzare question especially when considering the timeline and the end results of what happened during COVID lockdowns.
Are you unaware of government subsidies for fossil fuel companies? And have you never heard of PPP funds?
To my knowledge, claiming that oil companies received no assistance during covid when their prices went to $0, they received a lot of funds in fact. So much assistance in fact that they came out ahead and made serious coin.
They received anywhere from $3 to $7 billion dollars in this country alone for the period.
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There was some analysis a while back saying much of it was about half and half actual scarcity vs corporate greed. That's just the nature of the economics of monopolies/oligopolies, and exactly why they should never be allowed to persist. Although I think that 50-50 was in reference to all goods, not fuel particularly, so maybe it was worse for fuel
>Russia’s invasion of Ukraine caused global energy prices to rise dramatically in 2022, exacerbating existing price increases due to rising demand from the post-pandemic economic recovery.
I guess it's hard to separate the two.
> rising demand
limited demand... from what? a return to pre-pandemic production levels? The production was always there (no missing refineries afaik) they just have a few convenient reasons to gouge everyone unable to negotiate fair prices.
Speaking as someone who hates oil companies, I disagree. The energy transition is going to be very messy by definition. There are lots of factors and they all have different time scales, which makes it impossible to match them up. Oil and gas investments have minimum payback periods of 5-30 years, and so they can't respond to short term events, even intense ones. As global demand for fossil fuels falls, it will get even messier.
I'm not saying the fossil fuel companies are all acting in good faith, I'm saying it doesn't matter. They couldn't match supply to demand effectively even if they wanted to.
I mean that's the whole reason why free markets are so powerful; it let's market forces eventually solve these supply and demand problems.
Different sides of the same coin. The reliance on marginal suppliers has massively increased, which has pushed up prices for the whole sector, which has resulted in massive profits for everyone.
If your really need X barrels of oil and a marginal supplier can squeeze you for those last few barrels well… suck it up because that’s the new price of oil. There is nothing else that can be done; your demand isn’t elastic. Demand has to be killed with declining economic activity until we are back to balance.
In southern California sdge is hanging out $1000 a month bills like candy even with a huge percentage of houses with solar. We need to start getting some class action lawsuits going.
Nationalize the California energy grid. Privatization and deregulation set the state on fire.
Idk what ima do. I have 500$ left and don't make much money but my bills have gone nuts, same with food prices. Luckily my wife should be getting a better job in April but it's absolutely demoralizing.
Yea man I know the feeling I’m drowning atm…. My girls father hit her with a suit awhile back from her horrible car accident bc she wouldn’t just give him 50k out of it when she got it to let him play the stock market. Now her wage is garnished all the way down to 400$ per check and I’m currently off work recovering from a full hip replacement at 34Yo from trauma….. I’m still a month or more out from getting back to work…. I push and push myself at therapy but it’s just not fast enough….tbh I’m ready to exit stage left. Take care.
Meanwhile SW Washington is still $0.10/kWh. Yay state run hydroelectric, I guess
Yeah my $700 electric bill for 4 weeks of energy use In February is definitely helping me approach the poverty line.
my bill was $60
I live in Iceland
our electric bill is never over 72-75$ USD a month here in Pennsylvania USA... used to be 55-60$ but they did tell us an increase was coming. Still reasonable. (for now.. )
I read in the paper that they pay $1500 for a house in Sweden
For the month of December, yes. It highly affects those who heat up their houses with radiators using only electricity. The price in December per kWh was about $0,4. As of February its below $0,1 per kWh. I lowered the temperature at home which is 200m2 to 17 degrees and was able to keep my bill at $500. We are getting refunds by government subsidies now however to cover for the higher costs.
The power of an actual humane government should never be underestimated.
Electric bill for 1700 sq ft in Washington State is like $80-120. We're well below national average per kwh though
Well, most of the US doesn't have cheap geothermal energy...
well, we have 160 volcanos, 10 could go off anytime
Extract more heat to lessen the anger of the volcano gods?
this is true, boreholes tapping off pressure have lessen earthquakes
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I just think it's crazy how if we invested in nuclear energy technology that was actually good for producing power at scale like back when we had the opportunity we wouldn't even have this problem
What's crazy is America still won't green their grid. China is building renewables like crazy, and has plans to switch over eventually, whereas America does not.
There is a very real possibility that sometime in the future America won't be able to keep the power on, but China will.
All thanks to short term thinking, and infrastructure not being profitable according to capitalism.
Not if the USA can help it - seems like this country is headed for a conflict with China to keep it in its place in the "rules-based economic order"
Yup. War is possibly favourable for America, since military is one of the only advantages they have left.
China would love to flex their muscles to get better economic deals. But China is playing the long game better, and they only need to wait it out.
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Some places did. The plant near Raleigh, NC generates enough power for about a million people, although additional reactors that were planned ended up getting cancelled. About a third of the states energy comes from nuclear. Hence why rates are still $0.12/kWh there.
Or, as an alternative, I live in Washington now, where much of our energy comes from hydro, and we're at $0.10/kWh.
Our country needs to be smarter about who we vote for. Infrastructure and a variety of other issues should come way before a minor tax break, yet people seem willing to sell their soul for a few more dollars up front. We end up paying that tax break back many times over to predatory private industries, widescale power outages, inflation / national debt, and numerous other very obviously forseen consequences
Well, if you really care, you could put a retail price cap on the exported LNG for the good of humanity....
Btw, I know my gas and electricity doubled in price, and it's not Russia I am blaming.
Love having establish hydroelectric where I live, barely a blip when it came to my bill.
Same here in WA
Oh boo hoooo the homeless! Won't someone think of the record profits, just for once! The peasantry has grown so selfish these days....
Oh, is that why the prices went up? Not greed on the part of the energy corporations? I wonder what their profit margins look like, before and after?
From Norway. My electric bill is around 100% more. Fuel is at least 50% more expensive. Food and groseries some products are doubled in price and most other is 25%> increased. And norway do produce both electric and petrol....
Just as bad in the US, but no free college subsidized by energy.
>And norway do produce both electric and petrol....
That's because everything is often flogged to the free market. Even if your country produced a lot of energy it won't offset local costs.
e.g. UK electricity costs are due to go up to £0.5 / kwh in April despite the fact half our energy is now produced by renewables and should be dirt cheap.
Well that's hardly true. I'll throw in a live sources link here in a moment
I've seen that renewables number anywhere between 10 and 50% depending on the prevailing conditions. This December there was no wind blowing at all and it stayed at about 8% for nearly a month.
This is the problem with fossil fuels and their centralized nature. The poorest people and nations are the most dependent and therefore the most vulnerable to price shocks.
Rich people can install solar, batteries, heavily insulate their homes, retrofit boilers and heaters. They can switch to EVs. They can absorb higher energy costs but they can also afford to avoid them together.
It really highlights how we made a mess of this transition. We should have pulled subsidies from fossil fuel companies and used the money to build out a green economy from the ground up and we should have started decades ago.
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Newsflash - neoliberal policy making has caused unnecessary increases in energy prices for generations. Why do prices increase? - to easily uphold and leverage power.
If only there was some form of renewable energy instead of relying on coal and gas. Oh well.
This is the same behavior that happens when a hurricane is going to strike somewhere and a evacuation is issued for the population. All the hotels in surrounding areas raise the price of hotel rooms for the people who evacuate. It's call Price Gouging and in a number of places it is illegal. It needs to be illegal everywhere.
If you lived in area like this one spot in Illinois that produces more horseradish then every other place in the world, You would expect you could buy horseradish cheaper there than anywhere else. But somehow the farmer next door to you, starts selling it for the same price that he sell it on the other side of the planet, which is more expensive because of the transportation costs, packaging, etc.
The is what late-stage capitalism is all about. It is about using the same economic schemes large companies use to price oil. Even though oil can be produced in the US far cheaper than other places, the Saudis control and tell the US what the price of oil should be. Now they treat all commodities like that, it is why food has gone out of sight. We decided a number of years ago to use food (corn) as fuel. Allowing Wall Street to act like OPEC and set the price of corn. Starving people in poor countries (such as Mexico) who rely of corn not for ethanol, but food.
As the price of corn rose so did other foods rise, as corn became more valuable, farmers and companies planted more corn as they made more money using their land for corn than other crops, such as rice or wheat, oats or barley. Forcing those who didn't plant corn to raise there prices.
The sad part is corn isn't even the best plant to make ethanol out of , they just have the biggest lobby in Washington. Certain forms of bamboo with a higher sugar content and biomass, (more ethanol per acre), is a much better plant to use to make ethanol.
This is the exact same economic nonsense that is increasing the cost of energy in the US.
As my Mom said back in the seventies, (a visionary genius), solar power will become common as soon as companies figure out how to charge us for using our sun for energy as if they own it. Even now certain states are taxing people who go off grid with solar, justifying the tax by saying it increases the prices of electricity for everyone else who stays on the grid. Its why large electric companies are offering to put solar panels on your house, they recieve free energy they sell to others and still charge you.
Capitalism just truly and forever sucks. We need laws that protect us from companies that don't have a conscience. Capitalism with a Conscience is the only economic plan that is fair.
Have one publicly owned company on the market. As the government owns it, it can incentivise the directors to pursue 'fair' margins however you want to define that.
Other companies either get with the program by competing at the new price level or put themselves out of business. And when it does shareholder payouts, that would be going directly back to the government so it pays for itself.
If it goes out business, spin up another with less foolish operating directions.
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“Likely”? Doesn’t sound like a convincing conclusion.
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I was trying to figure this out, I thought it was something local. Usually the state passes on extra bills to the customer, I didn’t realize it was more of a global thing. My energy has been ridiculous with no changes I’m in VA and the same for my mom and she’s in NC.
War is good for business somehow.
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Please anyone with half a brain knows they are using this as a front
Utilities should never be private. They should be federal only. That way every single American household pays the same rates. Gasoline, electricity, water, natural gas should all be federally regulated. We have had enough with these greedy companies.
Yet another reason we need to support Ukraine in getting Russia tf out of there.
Rip to the all folks barely scraping by.
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This is still a result of capitalism, though. The economics of it is just back bending on everyone else's part to keep the wealthy wealthy.
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Oh since Russia invaded? Now let’s see the numbers from when Biden and his cronies blew up the Nordstream pipeline to let the private corps come to the rescue. You know, for science
Oil died the day putin went into Ukraine. No country is going to want to remain exposed to that level of risk if they can help it.
112% must be conservative. My bill was £80 per month before. Now it's £400.
Sort of sounds like Russian propaganda.
“If the world would just support Russia in successfully winning the war with Ukraine, prices would be better for the entire world!” - Russia probably
Russia is not that significant. Also, Ukraine is not Russia
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First this study was funded by China, so a cynic might argue that they have a vested interest in discouraging sanctions. If you read the article the increase only represents 4.6 - 6% increase in costs. What undoubtedly has pushed people into poverty is the rise of food, yes, in part due to fuel, but mainly because of Russia's impeding Ukrainian grain and Russian fertilizer.
atchijov t1_j8yw7tf wrote
At the very least this is the small part of the problem… record profits posted by every single fossil fuel related company is much bigger issue. Russian war is just a convenient excuse.