Will the Taliban Takeover in Afghanistan Cause a Problem for Gas Prices?
Gas prices fluctuate quite frequently, and sometimes it might seem like prices are controlled by what time the sun sets. No matter how great the gas mileage is on your vehicle, increasing gas prices still means less money in your wallet. So, besides the phases of the moon, what causes gas prices to increase? The news might seem just asinine a reason for price increases as the time the sun sets, but it is, in fact, a legit cause. That’s why drivers are thinking about all of the recent news out of Afghanistan regarding the Taliban.
Reports on the news that allude, or rather exaggerate, to a potential gas shortage cause customers to flock to gas stations, which causes prices to increase in an example of supply and demand 101. For example, while the coronavirus (COVID-19) Delta Variant is not expected to increase gas prices, news reports could potentially cause an increase if panic buying ensues. Now, with increasing tensions in Afghanistan in the wake of the takeover by the Taliban, will that news also cause prices to skyrocket?
The current situation in Afghanistan
On August 15, 2021, the Afghan government collapsed rapidly and was seized by the Taliban. American troops in Afghanistan have been pulling out over the last several months and equipping the Afghan military to defend against the Taliban, which largely proved ineffective. Currently, the deadline for all American troops to withdraw from Afghanistan is August 31st, and the Taliban has been vocal about not extending that deadline. Additionally, Afghan nationals have been fleeing the country amid fears of what will happen with the Taliban resuming control.
Will the Taliban taking over affect gas prices?
The Taliban takeover should not affect gas prices because there is minimal oil production in Afghanistan and most of America’s crude oil comes from other Middle East countries. Additionally, according to Eurasianet, the Taliban have pledged to support a natural gas pipeline to be built across Afghanistan. This was not entirely expected, and in fact, security concerns about attacks by the Taliban have been one of the most common concerns for project developers.
Lots of things have affected gas prices in the past
One of the biggest reasons for fluctuating gas prices is the price of crude oil. According to the BBC, after the global pandemic caused oil prices to fall, they are now rising again. The White House is asking oil-producing countries to increase production to stabilize increasing gas prices. However, crude oil prices are not the only factor in increasing gas prices. A shortage of materials can lead to prices skyrocketing as the supply cannot meet the demand. This includes a shortage of tanker drivers able to transport the gas to fuel stations.
Another cause of increasing gas prices is panic buying. After the Capitol Pipeline was hacked in early May, a “perceived” gas shortage prompted not only panic buying but hoarding as well. In fact, over-reporting on the pipeline being hacked fueled (pun intended) consumers to flock to gas stations and ultimately caused a completely unnecessary and avoidable gas shortage. Unfortunately, there is still the potential for a similar situation occurring with the situation unfolding in Afghanistan.
Gas prices will always fluctuate, similar to the stock market. However, drivers can keep prices from skyrocketing out of control by avoiding gas shortages induced by unnecessary panic buying. Additionally, remember that hoarding gas is never a good idea, as one woman found out after her car burst into flames during a police chase. Hopefully, the situation in Afghanistan can be resolved quickly and peacefully, and the Afghan people can return to their lives in peace and safety.