The steady rise of both gas and grocery prices this year has become a hassle that many Americans can relate to.
On Tuesday, the U.S. Labor Department reported that consumer prices had increased by 8.5% since March of last year, the highest it’s been since 1981.
This only puts pressure on the Federal Reserve to continue raising interest rates.
Economists have pointed out various factors that have led to inflation.
With the arrival of the COVID-19 pandemic in 2020, gas became less expensive as fewer people were on the road. However, the demand for food and other goods had gone up, with many grocery-store shelves, at that time, being emptied.
Over time, more motorists were occupying the roads and there was a greater inventory of store products.
Many companies have experienced a drop in their supply chain when they are unable to manufacture their products at an efficient rate which in turn, increases the demand for those products.
As a result, companies will then increase the costs of their products.
What occurs internationally can play a role in local economics, such as Russia’s invasion of Ukraine. Ukraine, formerly a part of the Soviet Union, had expressed its desire to join the North Atlantic Treaty Organization- an alliance of multiple countries originally created to provide security against the Soviet Union. In retaliation, Russia invaded Ukraine, on Feb. 24, with the sole purpose of taking control of the country.
Since then, the cost of crude oil skyrocketed. Why?
Along with the U.S., Russia is one of the top countries in global oil production. With the latest war, there has been concern that the oil supply from Russia would be disrupted, resulting in the rise of gas prices.
The uptick in prices has had the nation feeling like their wallets are being emptied – especially our locals.
Gas Prices
Becky George says that she feels the gas hike when at the pump. But budgeting was something she was quite familiar with before seeing astronomical prices.
“Save here, so you can spend there,” she said. “That’s always been my philosophy.”
However, in this instance, George has felt the need to fill her tank up all the way when she can. It’s her way of keeping ahead, because the following day may see a higher price per gallon.
The national average for regular gas is $4.10 per gallon, with California being hit the hardest at $5.75, according to AAA.
As of Feb. 12, Florida’s average gas price was $4.07 per gallon – its lowest price in more than a month. The state average is 10 cents less than the week prior.
“Gas prices are following the downward trend set by falling crude oil prices,” said Mark Jenkins, spokesman for AAA-The Auto Club Group. “Oil futures are falling because of global demand concerns related to COVID-19 outbreaks in China. The potential of higher U.S. interest rates and a strengthening dollar have also put downward pressure on petroleum prices.
“In addition to all that, members of the IEA (International Energy Agency) have joined the United States in an unprecedented release of petroleum reserves to offset the shortfall of Russian crude.”
Michael Wilson, however, said he’s not very optimistic as the average cost in Hillsborough County has been sitting at $4.02 per gallon.
He travels back and forth from Riverview to Plant City in his Ford F-150 – what some would call a “gas guzzler.” He may spend anywhere from $800 to $1,000 a month on gas, and it takes up a sizable portion of his paycheck, he said. And he still may have to limit himself depending on where he goes for fuel.
“Most pumps have a $75 to $100 cap, so that only lets me get half a tank or three quarters,” Wilson said.
While his commute to and from work is a necessity, he said that he may have to be more mindful of where he travels if prices continue to spike.
Walking a short distance from home to work is a luxury for Siria Lopez. Her boyfriend drives to Lakeland for work with their only car, which takes up the bulk of fuel. Yet they’re always trying to find discounts and the lowest sales at the pump wherever they can as well as filling the tank in small quantities.
“We’re always pumping at Sam’s Club, or I’ll use my Shell card to get like 10 cents off,” Lopez said. “I know that gas prices are high, but to fill our tank of gas on our car is like $40, which isn’t much different from $35 that I was paying last year.”
On Tuesday, President Biden announced that his administration would be lifting a summertime ban on a type of fuel known as E15 to help ease prices. And last month Florida lawmakers agreed to temporarily suspend Florida’s gas tax, but that would not occur until October
Food Prices
The Consumer Price Index, which measures economy-wide inflation, saw a rise in food prices from February of last year to February of this year by 7.9%. Economists expect prices to continue to surge during 2022 and many consumers are already making adjustments and sacrifices.
“I shy away from a lot of meat,” George said. “I try to stick more with starches and vegetables and proteins from other places.”
That reduction may become beneficial in the long term.
The cost for meat, poultry, and fish is predicted to rise from 3.5% to upwards of 4.5%, according to the U.S. Department of Agriculture.
Although he’s not letting the price at the pump affect his commuting, Wilson has seen the need to budget when it comes to grocery shopping.
“Groceries have definitely gone up for sure,” he said. “It’s definitely something that’s starting to affect finances more than it was.”
In fact, more simplistic products such as dairy, fruits and vegetables are all expected to become more expensive.
Lopez has already started to experience the toll that comes with paying higher prices.
“The food inflation is much more than the gas,” she said. “It is affecting us much more than gas. A year or so ago, I was spending like $90 for us a week. Now it’s gone up to $150, and this is milk going up, eggs going up. The food is probably more heavier on my budget than the gas.”
As a result, she has had to hold back on buying her favorite name brand foods and going with alternative brands.
With the uncertainty of how things will pan out in the long term, many consumers are left in a vulnerable position, having to adapt to a crucial moment in history.