At a gas station near Cologne Airport, Germany, Bernd Mueller watches as the numbers climb quickly on the pump: 22 euros ($23), 23 euros, 24 euros. The numbers showing how much gas he gets are also rising. But much slower. Painfully slow.
“I’m getting rid of my car in October, November,” said Mueller, 80. “I’m retired, and then there’s gas and stuff. At some point, you have to scale back.”
Around the world, drivers like Mueller are rethinking habits and personal finances amid skyrocketing gasoline and diesel prices fueled by Russia’s war in Ukraine and the global recovery from the COVID-19 pandemic. Energy prices are a major driver of inflation that is rising worldwide and making the cost of living more expensive.
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A motorcycle taxi driver in Vietnam turns off his ride-hailing app instead of burning precious fuel during rush-hour backups. A French family adjusts its ambitions for a holiday in August. A graphic designer in California charges the gas price for a night out. A mother in Rome, calculating the cost to bring her son to the camp, mentally skips pizza night.
Decisions about the global economy are as varied as the consumers and countries themselves: walk more. Dust off that bike. Take the metro, train or bus. Use a lighter touch on the accelerator to save fuel. Rate that road trip – is it worth it? Or maybe even go car-free.
For the countless millions who don’t have access to adequate public transportation or otherwise forego their cars, the solution is to grit their teeth and pay while cutting costs elsewhere.
Nguyen Trong Tuyen, a motorcycle taxi driver who works for the Grab online taxi service in Hanoi, Vietnam, said he simply turned off the app during rush hours.
“If I get stuck in a traffic jam, the fare won’t cover the cost of petrol for the trip,” he said.
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Many drivers have discontinued their services, such as Tuyen, making it difficult for customers to book rides.
In Manila, Ronald Sibeyee used to burn 900 pesos ($16.83) of diesel a day to drive his jeepney, a colorfully decorated vehicle popular for public transportation in the Philippines that evolved from American military jeeps used after World War II. have been left behind. Now it’s a whopping 2,200 pesos ($41.40).
“That should have been all our income. Now there’s nothing left, or anything,’ he said. His income has fallen by about 40% due to the rise in fuel prices.
Gasoline and diesel prices are a complex equation of the cost of crude oil, taxes, the purchasing power and wealth of individual countries, government subsidies where they exist, and the discounts taken by intermediaries such as refineries. Oil is priced in dollars, so if a country is an energy importer, the exchange rate plays a role – the recently weaker euro has helped fuel prices rise in Europe.
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And there are often geopolitical factors, such as the war in Ukraine. Buyers shunning Russian barrels and Western plans to ban the country’s oil have shaken energy markets, which are already struggling with tight supplies due to the rapid recovery from the pandemic.
There is a global oil price – about $110 a barrel – but no global pump price due to taxes and other factors. In Hong Kong and Norway, you can pay over $10 a gallon. In Germany it could be about $7.50 a gallon and in France about $8. While lower fuel taxes mean the US average for a gallon of gas is slightly cheaper at $5, it’s still the first time the price has been this high. is.
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People in poorer countries quickly feel the stress of higher energy prices, but Europeans and Americans are also being put under pressure. Americans have less access to public transportation, and even European transit networks don’t reach everyone, especially those in rural areas.
Charles Dupont, manager of a clothing store in the Essonne region south of Paris, simply has to use his car to commute to work.
“I practice eco-driving, which involves slowing down and avoiding sudden braking,” he said.
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Others do what they can to economize. Letizia Cecinelli, who filled her car at a petrol station in Rome, said she was cycling and tried to reduce car trips “where possible”.
“But if I have a child and I have to take him to the camp? I have to do it by cutting out an extra pizza,” she said.
Pump prices can be political dynamite. US President Joe Biden has urged Saudi Arabia to pump more oil to lower gas prices, and decided to travel to the kingdom next month after the Saudi-led OPEC+ alliance decided to ramp up production. The US and other countries have also released oil from their strategic reserves, which helps, but is not decisive.
Several countries have fuel price caps, including Hungary, where the discount does not apply to foreign license plates. In Germany, the government cut taxes by 35 cents per liter on petrol and 17 cents on diesel, but prices soon started to rise again.
Germany has also introduced a discounted €9 monthly subscription to public transport, leading to overcrowded stations and trains over a recent holiday weekend. But the program lasts only three months and is of little use to rural people if there is no train station nearby.
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In fact, according to the German Gas Station Association, people are pumping as much gas as they were before the pandemic.
“People are refueling just as much as before — they grumble, but they accept it,” said group spokesman Herbert Rabl.
Is there lighting in sight? Much depends on how the war in Ukraine affects global oil markets. Analysts say some of Russia’s oil will almost certainly be lost to markets as the European Union, Russia’s largest and closest customer, has vowed to halt most purchases from Moscow within six months.
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Meanwhile, India and China are buying more Russian oil. Europe will have to source its supplies elsewhere, such as exporters from the Middle East. But OPEC+, which also includes Russia, has failed to meet its production targets.
For many, spending on things like nights out and, in Europe, the near-religious dedication to long late summer vacations is on the cutting table.
Isabelle Bruno, a teacher in the outskirts of Paris, now takes the bus to the train station instead of the 10-minute ride.
“My husband and I are very concerned about the holidays as we used to drive a lot in our car when visiting our family in the south of France,” she said. “We are now going to pay attention to train tickets and only use our car for short journeys.”
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Leo Theus, a graphic designer from the San Francisco Bay Area town of Hayward, has to be “strategic” about gas budgeting as he goes to customers — he might not fill the tank all the way. California gas prices are the highest in the US, reaching nearly $7 a gallon in some parts of the state.
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When it comes to going to a club or bar after work, “Now think about gas, you have to decide, is it really worth going out or not?” said Theus.
Corona reported from Rome, Le Deley from Paris and Dinh from Hanoi, Vietnam. AP reporters Joeal Calupitan in Manila, Philippines, and Terry Chea in Oakland, California, contributed.
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