Get ready for another oil price hike in the coming weeks, as there is news of a price cap sanction on Russia. The act could send the prices of oil, which include fuel and other related products, to surge. Prices could still continue to rise over the coming weeks to months due to this. If you’re on an electric car like the Nissan LEAF, however, you won’t have to worry too much.
For the past few months, oil prices have been steadily rising, giving way to the possibility of fuel prices in the country hitting triple-digit price averages for all stations. Currently, most fuel prices are pinned at about P90 per liter or more depending on the station, but that could all change once the price cap sanction comes into effect.
There might be another price increase next Tuesday, July 5, 2022, and earlier today oil prices surged after the G7 countries (Group of Seven) convened and agreed to impose more sanctions against Russia for the conflict in Ukraine. The likes of Germany, Italy, France, and the U.S.A., countries part of G7, stated that the price cap will put more pressure on Russia.
The price cap on Russian oil will be imposed to ease inflation as well as to reduce the dependence on Russian-sourced fuel. The price cap will set a limit to how much the country can charge for its oil resources, and the G7 is hoping that the price cap will reduce Russia’s revenues and put a damper on its efforts to fund its war in Ukraine. With that price cap in place, Russian oil could find its way back into the global marketplace, hopefully easing supply woes and limiting the price hikes.
Earlier last month, the European Union also imposed its own sanctions on Russian oil, outright banning the country’s supply due to the ongoing conflict.
Even with the sanction, however, there is a potential for it to backfire. While it does allow Russian oil into the global market, the chances that Russia could pull out of its supplies looms, which could see more price hikes in the near future. In response to this, France called on other nations to increase their oil production in order to mitigate the dependence on Russian oil.
As it stands, motorists will have to brace for another wave of price increases thanks to the price cap. It’s still up in the air whether this action will slow down the inflation that we’re currently experiencing, or whether further price hikes will get worse from here on out. All we know is that every drop of fuel counts right now so drive economically, use a hybrid like the Toyota Corolla Cross, or just go fully electric perhaps?