As tensions between Ukraine and Russia continue to escalate, energy prices for small businesses could rise even higher. And with the price of a barrel expected to hit $100 (first time since 2014), an increase in the national average price is sure to follow.
Energy Prices for Small Business Could Rise Even Higher
As reported by Fox Business, this conflict may be responsible for energy prices continuing the upward march of the past year. According to R Street Institute resident senior fellow for energy, Philip Rossetti, the situation in Ukraine, can’t be good for prices. Adding, “We don’t know how bad it would be for prices. But it can’t be good for prices.”
When the Biden Presidency took over in January 2021, the average gas price was $2.34 per gallon. This has increased at a steady pace over the past year. According to the U.S. Energy Information Administration, the price was up to $3.06 per gallon by June of 2021. And by December, it was up almost a dollar to $3.30 per gallon. By the end of January 2022, the average is $3.31 a gallon, with some states like California paying $4.70.
Rosetti’s sentiment is shared widely. And when you add OPEC’s trouble in increasing production in the past several months, the price could ramp up quickly if Ukraine and Russia don’t come to an agreement. And eventually, this will trickle down to small businesses around the world who rely on gas for their operations.
Gas Price and Small Business
With the effects of the pandemics still lingering, the last thing small businesses need is higher gas prices. Owners are dealing with COVID mandates, fewer customers, supply chain issues, and the highest inflation in 40 years.
While many businesses can limit their gas consumption and still manage to run their company, that is not the case for others. This is especially of concern in today’s environment where customers want their food, groceries, and other purchases delivered.
The cost will also be a bigger burden for gig economy workers that rely on their vehicles to earn a living. From Uber to DoorDash and even Amazon Flex drivers, higher gas prices are going to mean less money to take home.
This article, “Energy Prices for Small Business Could Rise Even Higher Amid Russia-Ukraine Tension” was first published on Small Business Trends