Gas prices in Guam have recently risen from $3.13 in May 2020 – the lowest in recent years – to $5.69 in March 2022. This is on par with gas prices in the rest of North America, and it has incited worry and apprehension for the future among most Guamanians.
There are many possible causes for these sky-high gas prices, although realistically all of these possible reasons play a role. During the pandemic, due to lockdowns and shelter-in-place recommendations, the use of vehicles and thus consumption of gasoline was cut back sharply. This caused them to sink to record lows during 2020. This year, after pandemic restrictions were mostly lifted, it was difficult for oil production facilities in Russia, the Organization of the Petroleum Exporting Countries and other oil-producing countries to match pre-pandemic levels of production. They were unable to increase production rapidly. Along with this shortage, sanctions placed on Russia due to the war in Ukraine have caused many countries that normally relied on its oil to face shortages of their own, severely impacting the global oil market and thus driving up prices even further. Finally, shortages of labor, rigs and trucks have caused U.S. suppliers of oil to fall short of even domestic demand.
All of these factors mean that oil prices and, by extension, gas prices will remain elevated for several months, at the very least. However, according to financial experts, these prices have still not reached the record highs of 2008. Thus, it is doubtful if customers will cut back on their driving and gas consumption in the near future, at least until current gas prices match those historic highs.
Still, Guamanians are finding it difficult to adjust to the price changes. Gas, which has always been a necessity, is now much more expensive than it was before, leaving less money for everything else. Even going to work costs much more than it did before. Of course, salaries have not increased to compensate. Household budgets are being affected severely and stretched thin. People are forced to reduce their consumption in some other ways in order to make up for this price difference by reducing their electricity consumption or their food budgets, among other measures. In addition to this, businesses have also been impacted. Fuel prices can make up 40%-50% of total ship operating costs, and these oil prices mean that ships can cost up to twice as much to operate as they did before the price increase. Guamanians from all walks of life and economic spheres have all been hit hard. People have been forced to adjust. Others suggest buying a moped, an electric vehicle, a more fuel-efficient car or simply a bicycle.
These gas prices can cause issues for other industries as well, besides private consumers. Cross-country haulers that use heavy vehicles have to absorb this heavy fuel price increase. This also means that shipping prices by air or by sea might increase. It is assumed that prices are expected to rise across the board, for most goods – even essential ones.
What can the government do to ease the strain of oil prices on citizens? This seems to be the question on everyone's minds. Experts are divided on this issue. Some suggest that government-imposed sanctions on oil prices, and the subsequent sustained and widespread decreased consumption of oil in North America, might be the solution. Others suggest negotiating with Saudi Arabia or OPEC or drawing on the U.S. Strategic Oil Reserve. However, there is bipartisan agreement among politicians and citizens that these gas prices are, quite literally, the price we have to pay in order to squeeze Putin and Russia out of occupancy in Ukraine. Until there is definite action taken and the sanctions against Russia are removed, Guamanians have no choice but to continue to adjust to these rising gas prices.
