Putin, Biden, Big Oil, and $5 Gas

by | Mar 12, 2022 | Environment, Politics, Spotlight

As the world places sanctions on Russia for the invasion and occupation of Ukraine, prices at the gas pump have skyrocketed. Two interpretations of this phenomenon have dominated the political discourse, and they’re both wrong.

MAGA Republicans are rushing to blame Biden for high gas prices, as well as for the price of everything else going up. But the President of the United States doesn’t set prices. Capitalists do. If you subscribe to classical economics, inflation happens when you and I, regular working-class people in the lower 90% of income, have saved up too much money, thereby creating more demand than the market can fill. But is that what is actually happening? No. In fact, corporations set history shattering profits last year, and while wages rose, they lagged far behind profits and still to trail remain lower than their historical highs. Only drops of this wealth pooling up at the top echelons of society is trickling down to working people. It would seem that, for most things, prices go up because the oligarchs sitting in board rooms say they should, not because of anything you or I do with our saving or spending habits.

Photo credit. Peter Van Allen, courtesy MaineBiz

Meanwhile, Liberal Democrats argue that the shock to the oil market is due to the sanctions on Russia, which are affecting the supply of oil on the global market. Surely it is our patriotic duty to pay more at the pump to help shoulder the burden of the Ukrainian people as they face an illegal invasion and occupation by an imperial force, they argue. While the appeal to our altruism is noble at first blush, this line of reasoning is ill-informed. Russian crude oil makes up only 3% of the US crude oil imports. And it takes 6 to 9 months for crude oil extracted today to get through the refining process and show up at your local pump as gasoline in your car. The United States exports slightly more crude oil per day (8.63 million barrels) than it imports (8.47 million barrels), so why are we seeing these massive jumps in oil prices right now, when we shouldn’t see any price shocks for another 6 to 9 months? As of March 11, the average price for regular in Maine was $4.31 while California has already passed the $5 mark. So how does Russia’s 3% of the oil market account for a 34% increase in gas prices over the last week? 

Well, it doesn’t. This is price gouging, plain and simple. As disaster capitalism becomes the new normal, predatory price gouging like this is the way to increase profits for those who are already criminally wealthy. Just like the price of bottled water skyrockets every time a hurricane hits Florida. Just like the price of life-saving medications moves ever out of reach for those who need them.

Sad to say, but paying more at the pump doesn’t do anything to help the Ukrainian people, because we weren’t running our cars on Russian oligarch gas to start with. We are, and will continue to, run our cars on American oligarch gasoline. The only thing paying higher prices at the pump is doing is putting even more money in the pockets of a vulture-like capitalist class, who descend on every tragedy, licking their lips, ready to make a quick buck.

So, what can be done? While I personally have taken to driving at 55mph (the most fuel-efficient speed) on my highway commutes to save gasoline, and checking the air pressure of my tires to make sure my fuel efficiency is optimized, individual solutions like this aren’t going to change the power structure in our society that created this situation. We should not allow a small number of very wealthy people to make decisions that affect the lives of everyone without any accountability. As socialists, we should renew our call for a Green New Deal, to transform our individualist car-based public transportation infrastructure, into one that centers social solutions: trains, trollies, buses and bus corridors, and active transport like walkable paths and bike highways. But to do that we must shift the power structure of our existing society from a very small number of incredibly powerful people who make decisions that affect billions, into one based in democracy, community, peace, and basic human dignity.

Asher Platts is a longtime social justice and environmental activist and a DSA member based in Lewiston.

Asher Platts

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