High Fuel Prices All Over the World. Why Fuel Prices Are Skyrocketing?
Petroleum products are one of the most expensive goods in the world considering their importance in our daily life. High fuel prices have always been an issue all over the world. But looking at the present scenario, it has been a too-priority problem for everyone, not just a simple issue. Even the world’s giant countries like the USA are taking it as a top priority problem.
The Rise of the Problem
Prices of petroleum products are always increasing. But it wasn’t a very big issue like it is now because inflation had a bigger cause in the increased price. People could adjust and take it in a normal way.
The pandemic of the year2020 changed all this. Countries went on lockdown due to the pandemic. There were no cars running on the road. Thus reducing the consumption of petroleum products. Fuels were sold in negative for the first time in history. Producers gave money to the one who buys petroleum products instead of taking the money. As it turns out that selling petroleum products at a loss is more profitable than storing them.
Role of Ukraine Russia war
The impact of the pandemic was slowly coming to an end and businesses were coming back to life. Fuels were again being sold at a fair price. But in the year 2022, another misfortune hit the world. Ukraine and Russia broke into the war. The war gave the producers to cover up the loss they had to bear in the pandemic and also be in a high profit.
Ukraine and Russia are one of the biggest producers of crude oil in the world. This war caused a crisis in petroleum in the international market. High fuel prices have become a major problem all over the world and it seems as if they will never get down and keeps on increasing in a more rapid way. The Ukraine-Russia war has also no sign of stopping any time soon. People are fed up and frustrated with the fuel prices all over the world. But is the war really the true cause skyrocketing of fuel prices or there are some other things.
OPEC (The Organization of Petroleum Exporting Countries)
OPEC is an intergovernmental organization of 13 countries founded on 14 September 1960 in Baghdad, Iraq. The major oil exporters in the world; Iran, Iraq, Kuwait, Saudi Arabia and Venezuela are the founding members of the organization. They are now joined by other 13 nations, Algeria, Angola, Equatorial Guinea, Gabon, Libya, Nigeria, Congo and UAE. This organization controls the international oil market. The supply and demand of oil products and the prices are all determined by the organization.
Role of OPEC in price hike.
OPEC member nations slowed down the production rate of petroleum products and reduced the supply of oil in the market. They gave the Ukraine-Russia war as an excuse given that Russia is one of the biggest exporters of crude oil in the market. But the reduction of the supply of raw oil from Russia alone shouldn’t have created the crisis as it is right now. Middle East countries alone have 299 years of oil left in their reserves as per the source; worldometeres.info. It seems that the producers are trying to make Russia and Ukraine as an excuse to increase the oil price significantly in the market. It might be seen as a loss cover-up but actually, the profit margin is very high. This resulted in high fuel prices.
It’s true that fossil fuels are slowly coming to an end. That’s why the OPEC countries are also reducing their dependency on petroleum products as sources of major revenue. These countries are transforming themselves into more tourist destinations and less as a country of oil.
Fossil fuels are now hard to find in upper layers like before. This makes producers dig more into the lower layers which results in high costs. But this still doesn’t justify the recent hike in petroleum prices.
Possible Solutions to High Fuel Prices
We have already realized that fossil fuels won’t last forever. We need another alternative source of energy which will also not bring much harm to the environment. The use of electricity and hydrogen seems to be the best alternative energy sources for now to replace fossil fuels. But we can’t replace the use of fossil fuels, which have been in use for more than 100 years, with an alternative overnight. It’s nearly impossible to do so. Now it seems as if high fuel prices will always be a top issue all over the world.
To tackle the issues of the recent petroleum price hike we might need to form an alternative to OPEC. OPEC is enjoying a monopoly in the international fuel market and we are the ones who are suffering. The USA needs to supply oil from its reserve imported from Iran in huge amounts. Oceans are great sources of fossil fuels and some of their parts still haven’t been used for fossil fuels. The likes of the south china sea have great potential in fossil fuels. These measures could be the best solution for the short term. But we still have a long way to go to bring something new and best for the future.
Use of Electricity and Hydrogen
The world is slowly moving towards a more sustainable and eco-friendly source of energy. Electricity and hydrogen seem to be the best in terms of more sustainable and eco-friendly sources of energy. The use of batteries and electricity is common in industries and or daily life too and its practice has also increased in vehicles too. But the use of hydrogen and fuel cells could be something new as it’s used in industries only and is seen in some cars in recent days. Many research and advancement in these technologies have been made in recent years to make the best out of it. But still, there are some things left to choose one of these sources of energy as the new and permanent source in all the sectors.
The recent price hike has affected people all over the world especially the ones with weaker financial conditions. Giant nations of the world should come forward in solving this issue and come up with the best short-term solution for now. We already got the best long-term solution in our hands which are cost-efficient and is best for the environment. This should help us tackle the current and future high fuel prices problem and degradation of the environment. It’s only a matter of time before we will permanently use these alternatives in all the sectors.