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"Americans Will Freak Out When Gas
Stations Run Out Of Fuel This Winter"
by Epic Economist
"If you thought we had seen the worst of fuel prices and shortages, we’re sorry to break it to you but official agencies are warning that the energy crisis is far from over and that the period from December 2022 to April 2023 will make history as one of the most chaotic and difficult winters on record. “A winter from hell,” they say. The U.S. simply can’t produce enough supplies to meet the growing demand. Our energy systems have been stretched to the limit, and now we’re about to face the consequences of all this.
The U.S. Energy Information Administration just released a new Short-Term Energy Outlook Report alerting consumers and businesses that all energy prices, including oil, oil-based fuels, natural gas, coal, and electricity, are set to soar above their historical highs in 2023, citing geopolitical uncertainties and extremely tight inventories as the main drivers of the coming spike. Shortages of fuels, including gasoline, are also on the horizon, according to the International Energy Agency. “The crisis is not over,” IEA said in a press release last week, with members urging the government to take action to address dwindling supplies of diesel and gas as well as prepare for electricity outages all across the nation.
2023 may pose an “even tougher test” than the energy crunch of 2022, which led energy prices across all categories to soar by nearly 30% for U.S. households, and force industries to slow down production to avoid “crippling energy bills,” the agency noted, adding that soon, we will begin to see campaigns that will encourage the public to use less energy. Right now, exports are running at record rates, and refineries are already operating around the clock, but inventories still remain below the seasonal average. In fact, they are at the second-lowest point for this time of the year in over 12 years, analysts reported. And there are no signs of improvement in the level of inventories despite the rise in energy prices.
None of this suggests that the trend of lower gasoline prices we’re thankfully seeing right now is going to be sustained in the long run. On the contrary, the latest figures suggest more financial pain for U.S. drivers. At the same time, electricity generation is also compromised. A major contributor to that crunch is the lack of alternative sources for power production: coal plants are being retired, and droughts in many parts of the country have hampered our hydropower capacity. A colder-than-expected winter could push consumption even higher and power grids are at real risk of collapsing.
Throughout the entire year, energy prices have been slamming U.S. consumers, but a paper by International Monetary Fund economists projects that their budgets will be even more squeezed in the months ahead. They estimate that the increase in fuel prices will raise households’ expenditure on energy in 2023 by 50% to between 7% and 10% of their income. “At some point in the future, historians will describe December 2022 to April 2023 as the winter from hell,” the Energy Intelligence Group. group stressed. “The energy system is already stretched to breaking point. No excess capacity exists today in the sector - none.”
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