Matt Letourneau, uschamber.com
In March, year-over-year consumer price increases topped 8.5%, causing the highest inflationary rise in 40 years. One of the biggest drivers has been skyrocketing energy costs, which impact virtually every sector of the economy.
While the war in Ukraine and supply chain impacts from Russian sanctions have exacerbated price pressures, energy prices were already escalating well before the conflict did. Gasoline prices have more than doubled since their pandemic lows and now average $4.21 per gallon nationwide. In the year preceding Russia’s invasion of Ukraine, prices had increased by about 40% (over one dollar per gallon). Natural gas and electricity prices are important contributors as well. This can be clearly seen in the Global Energy Institute’s 2021 electricity price map, which registered a record 5.6% increase in electricity prices last year alone — a number that has only gone up in 2022.
What’s behind high energy prices and what can we do about it?