Food and gasoline prices have been rising for several weeks, and the timing is hitting many people hard during the pandemic.
Nationally, the average price of gasoline is $2.72 per gallon, up 12 cents in a week, according to the American Automobile Association.
“Barring hurricane season, March may bring the most expensive pump prices of 2021,” said Jeanette Casselano McGee, a AAA spokesperson. “While the month is roaring in like a lion, by the end of it we could see some relief at the pump as refineries resume normal operations, especially if crude oil prices show signs of stability.”
A devastating recent winter storm that hit Texas and the southern Plains also caused several oil refineries to shut down, also impacting gas prices.
Logjams in the world’s supply chain are one reason behind rising prices, according to NBC News. The United Nations Conference on Trade and Development found that global shipping dropped last year, the first decrease since 2009. “The short-term outlook for maritime trade is grim. Predicting the pandemic’s longer-term impact as well as the timing and scale of the industry’s recovery is fraught with uncertainty,” the organization warned in a recent report.
Last week, President Joe Biden signed an executive order aimed at addressing a global semiconductor chip shortage that has forced U.S. car manufacturers and other industries to cut production. The executive order also requires a review of U.S. supply chains for large-capacity batteries, pharmaceuticals, critical minerals and semiconductors that power cars, phones, military equipment and other goods.
During the past year, the fragility of vital supply chains has been revealed repeatedly. The coronavirus outbreak led to an initial shortage of masks, gloves and other protective medical equipment. Automakers in the United States and Europe are now dealing with the shortage of computer chips.
Nearly every major automaker that produces vehicles in the U.S. has cut production because of the shortage by canceling shifts, slowing assembly line speeds or temporarily closing factories. Most automakers have tried to limit the cuts to slower-selling vehicles.
The chip shortage has cost the global auto industry the production of about 1 million vehicles, according to IHS Markit. The analytics firm expects the chip crisis to hit bottom toward the end of March, with supplies constrained into the third quarter.
Pandemic-related production roadblocks are contributing to rising prices for food, according to Phil Lempert, founder of SupermarketGuru.com.
“COVID-19 devastated food supply chains on the farm, had major upsets in both truck and sea shipping and certainly had an effect on labor as we continue to see workers in our food factories become infected or have to be quarantined and miss work,” Lempert said in a recent report. “Meat packing facilities are still not back to operating at full capacity, which also drives up costs for the packer. Farmers who raise livestock including pigs, cows, chicken and turkey have yet another problem. Corn and soybean that they use for feed has reached the highest prices in seven years.”
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