Economists warn of price hikes on gas and energy due to Russian sanctions

JACKSONVILLE, Fla. — Many of us locally will soon be feeling the effects of the sanctions put in place by President Joe Biden against Russia.

Those sanctions cut the Russian government off from Western financing, but Russia is a leading oil producer and a local economist says we could begin to see oil prices increase as a result.

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For part-time Lyft driver Eduardo Garcia, just about half of what he makes goes right back into his car.

“I’m out all-night driving and I make like $120 but I really only make $60 because I have to put a full tank of gas in,” he said.

After President Biden announced sanctions against Russia for its invasion of Ukraine, local economist and CEO of Heritage Capital Group Donald Wiggins said the average person is going to feel the hit in their bank accounts.

“Petroleum is already over $90 a barrel,” he said. “The first thing you’re going to feel is an increase in energy prices, gas prices, home heating prices, that filters throughout the economy because it’s used in so many different areas.”

“Gasoline from Venezuela is the same as gasoline from the Middle East, is the same as gas from Texas, so they’re pure substitutes for each other so if you have a disruption in one place you’ll have a disruption in another,” Wiggins said.

According to AAA, the average price of gas in Florida is $3.48, last year around this time it was $2.61. At home in Duval County, it’s an average of $3.44, but Wiggins says depending on how long the sanctions are in place, it could cause a ripple effect with other everyday purchases.

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“Transportation is going to cost more simply because energy prices are more. All the plastics that are used in packaging and shelving and everything else in the grocery store is going to cost more,” he said. “To produce the food is going to cost more, whether it’s at the farm or a manufacturing process or anywhere in that supply chain.”

For Garcia, he’s not sure if being on the road as much as he is right now, will be worth it in the future.

“I was telling my wife the other day I’m going to stop driving for Lyft a lot and actually focus on a job I can go commute to and work there and come back,” Garcia said.

Wiggins said to deal with this, it’s time to save more and cut back on other expenses.

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