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"Panic Buying Energy Supply Accelerates As
Shortages Send Prices To Skyrocket"
by Epic Economist
"The rush to hoard energy supplies continues to accelerate and it is creating massive shortages across every segment of global supply chains. As refineries announce that declining inventories will lead to fuel rationing in the coming weeks, consumers, manufacturers, freight carriers and farmers are panic buying gasoline and diesel in anticipation of further shortages and price hikes. Meanwhile, gas theft cases are being reported all across the U.S., as prices surpass the $6.00 mark in some cities and drivers face sticker shock at the pumps.
Diesel is essential for freight transport – is what carriers use to deliver goods to consumers. But it is also the main fuel used for industrial transport, so companies are doing everything they can to ensure supplies and prevent inventories from going down even further. Although some companies are trying to switch to other suppliers instead of buying Russian diesel, they will hardly be the only ones doing so, and alternative suppliers such as Saudi Arabia simply cannot absorb this extraordinary excedent demand. As demand largely outstrip supplies, all large markets for middle distillates will experience shortages, which will consequently keep pushing oil prices higher.
On top of being crucial to freight and industrial transport, diesel is the main fuel used to power mining and agricultural equipment. With prices for the fuel higher, the prices of the end products will also soar, exacerbating the inflation that has turned into a major headache for millions of consumers in the United States. Farmers are scrambling to stock up on diesel to power up the machines used to harvest their crops, with some of them panic buying whenever they can find the fuel available.
Over the past two weeks, fuel sales climbed 20 percent as drivers, businesses and farmers rush to hoard fuel in preparation for the imminent rationing and higher prices. Meanwhile, drivers are getting angry as panic buying of fuel is leading to long lines of cars waiting outside their local stations, with many locations closing unexpectedly as they run dry. Similar scenes are being reported in the U.S., the U.K., France, Spain, and also in Ukraine, as drivers desperately try to fill up their tanks before an inventory collapse occurs.
Apparently, the more prices go up, the more consumers try to get “creative”, with some people trying to use plastic bags and laundry baskets to store the heavy liquid gold. According to a recent report, one unidentified fuel hoarder was seen using a big plastic container to hold their purchase, only to have it spill onto the street.
The event prompted fire officials to issue a warning about the dangers of hoarding gasoline. "People underestimate the explosive power of gasoline," says Fire Marshal Nathanial Gibbons. The fire department urged all gas stations to call the authorities if they see someone collecting gas in an unapproved container. Cases of gas ingestion incidents increased by 21 percent in the weeks following the burst of the Russia and Ukraine crisis, according to AAPCC data. “Between February 24 and March 13, AAPCC data showed poison centers across the U.S. received 165 reports of gas ingestion, an increase from the 141 incidents reported during the 18-day stretch immediately prior to the invasion,” it reported.
The situation is getting so crazy, that people have been doing extremely crazy things too. Meanwhile, U.S. drivers will continue experiencing sticker shock as they pull up to gas pumps. However, analysts say that should expect another uptick as companies switch to summer blends of gasoline. During the warmer-weather months, gasoline is reformulated to prevent excessive evaporation, which makes it way more expensive to refine and distribute. Summer blends can be 25 to 75 cents more expensive than winter blends. So the combination of all of these factors will impact everything from trucking costs to Uber rates in the coming weeks. And, of course, consumer prices will continue to reach new highs while we collectively march towards a devastating financial abyss."
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