Has the gas shortage caused a massive price increase?

The United States just went through a nationwide gas shortage. This caused gas prices to reach all-time highs, causing panic buying across the country. How did it happen, and what can the US do to prevent this from happening again?

We’ll start by explaining what the Colonial Pipeline is and why it stopped supplying gas. Then, we will go through why and how it happened. More importantly, we’ll discuss what you can do in case it happens again.

Expect that nearly everything will be harder to get due to the pandemic. The recent gas shortage is just one example, but other products may be hit soon. In response, you should know how to prepare your household for these supply shocks.

Why did the US Colonial Pipeline shut down?

The United States relies on massive pipelines to transport natural gas and fuel. The Colonial  Pipeline sends fuel supplied from the Gulf Coast to the East Coast.

On May 7, the hacker group DarkSide launched a ransomware attack on this supply line. In response, it paused pipeline operations and paid the $5 million ransom.

Then, President Joe Biden said that the Russian government had nothing to do with this. Yet, there’s a “strong reason” to believe that the criminals lived in the area.

However, there’s another reason for the shutdown. Journalist Kim Zetter said the company closed the pipeline because it wouldn’t be able to charge customers.

What’s more, the Environmental Protection Agency (EPA) waived rules to help with the gas shortage. It was meant for 12 states, including North Carolina, South Carolina, and Florida.

Fortunately, the Colonial Pipeline company said it had restarted operations. Still, it would take several days for delivery to get back to normal.

Gas moves through the pipes at just 5 miles per hour. What’s more, a lot of stations are pulling supplies from this one source.

This caused gas prices to reach highs for the first time since 2014. California has the highest average price at $4.201. Meanwhile, Louisiana has the lowest at $2.705.

How did it cause a gas shortage?

While pipeline operations are back, this didn’t stop panic buying. Lots of people lined up at gas stations and convenience stores. Many tried to stock up on fuel using plastic containers.

It has gotten so bad that the US Consumer Product Safety Commission got involved. The CPSC tweeted on May 12, urging people not to fill plastic bags with gas.

Head of Oil Price Information Service Tom Kloza said the overblown gasoline demand wasn’t necessary. There was enough gas for 26 to 27 days before the pipeline shutdown.

Yet, the panic might be one of the major causes of the gas shortage. Social media may have led people to believe they would miss out on gasoline.

Many news outlets point to a truck driver shortage as another cause. Yet, the president of the Owner-Operator Independent Drivers Association, Todd Spencer, thinks otherwise.

He says the US has millions of people trained as heavy-duty truck drivers. Sadly, they don’t want to work because the entry-level roles aren’t good.

What’s more, Spencer added that they’re paid poorly. They get poor working conditions, working for 60-70 hours a week and eating junk food. Worse, the work can be highly dangerous.

Related Articles

Best Oil Stocks to Invest in

When is the Best Time to Sell Stocks?

How do you Calculate an Inflation Rate?

Lessons learned from the gas shortage.

Events like these help us find ways to improve. They let the country see what works and what doesn’t. In response, we can make sure it doesn’t happen again.

Meanwhile, you may learn how to prepare for events like this. See how you could make sure you aren’t heavily affected by a gas shortage.

We will list some of the lessons we could learn from recent events. Hopefully, this helps everyone continue their everyday lives despite emergencies like this.

1. The US needs better cybersecurity – The Biden Administration should protect important systems from online attacks. The supply of petroleum products is back, but other commodities might get hit in the future.
2. Price hikes might have prevented gas panic – Politicians could have increased gas prices to stop people from getting too much. If prices rose, people might have been more careful about buying. Instead, they stockpiled fuel, causing a gas shortage.
3. Everyone should have a backup plan – People could have tried to use less fuel. Later, we’ll discuss the many ways you could prepare for these events.

How to prepare for gas shortages

The US Department of Energy released guidelines for state and local governments. These can help them respond to shortages in case they happen again.

It also gave out tips for regular folks. What’s more, there are other ways you could prepare. Here are the following tips on what to do during a gas shortage:

1. Calm down – You won’t act properly if you don’t.
2. Check the news – Learn more about the gas shortage before doing anything. See how long it will last and the affected areas.
3. Use less gas – Plan your trips to avoid rush hours. Skip unnecessary trips to convenience stores and drive less often. Make sure your tires are properly inflated.
4. Buy lots of groceries – If you live far from supermarkets, you might want to buy more supplies. Purchase food and important stuff that could last a month.
5. Try working from home – Some companies provide remote work. If you can, have online meetings instead. If you can’t work from home, try carpooling or public transport. Many people are biking to work nowadays!
6. Store backup gas – See if you could safely store fuel at home. If you can, use proper containers. This could be your backup in case of another gas shortage.

Final thoughts

Gas shortages have a huge impact on countries. They can increase prices for other goods that have no connection to gasoline. After all, trucks supply your local stores every day.

Those vehicles need gas to run. If gas prices go up, transporting goods will become more expensive. As a result, consumers see price hikes in food and other products.

That’s why the government must prevent it from happening again. It must protect important systems better. Otherwise, it could make life harder for regular citizens.

More importantly, you should expect bad events like this to happen soon. Other shortages will come due to the pandemic. Still, you have many ways to prepare.

Learn more about the US gas shortage

Is there still a gas shortage in the US?

The gas shortage is ending, but some areas still have no supply. The Colonial Pipeline is back, but it would take time to return the gas supply to normal fully.

Which state has the lowest gas prices?

At the time of writing, Louisiana has the lowest gas price at $2.705. It’s followed by Mississippi, Texas, Missouri, and Oklahoma. However, this may change over time.

Which state has the most expensive gas?

As of May 31, 2021, California has the most expensive gas at $4.201. It’s followed by Hawaii, Nevada, Washington, Oregon, and Utah. Prices may have changed since.