- Energy prices have increased dramatically due to the situation in Ukraine.
- Natural gas and coal generate over half the power in the U.S. Prices for both have soared.
- Consider ways to reduce energy use to help offset the increase in energy costs.
As Russia’s invasion of Ukraine continues, utility prices have increased dramatically -- and they could stay high.
American budgets have been hit hard with high inflation and all-time-high oil prices. According to new data released by the U.S. Bureau of Labor, consumer prices are up by 7.9% in the last 12 months. Energy prices have increased dramatically due to the situation in Ukraine, with gas prices up 38%. As a result, utility prices are surging, and electric bills are expected to remain high.
Natural gas and coal price increases
Currently natural gas and coal generate more than half of U.S. power. Natural gas prices have soared by 70% from a year ago, and the price of coal by about 459%. Russia is the world’s largest exporter of oil to global markets, and the second-largest crude oil exporter (behind Saudi Arabia).
As the U.S. places sanctions on Russian fuel, and with more than half of energy usage coming from natural gas and coal, utility costs are expected to remain high. Americans typically use less electricity in the spring, with milder weather than in winter or summer. However, utility costs are likely to remain elevated due to rising fuel costs, high inflation, supply issues, and the current situation in Ukraine.
What options do Americans have?
The global energy crisis has combined with high inflation to force American families to make tough financial decisions as their budgets are squeezed. Lower-income families can see a disproportionate impact on their finances since they have less disposable income.
Using a budgeting app might help you find some extra ways to save. If gas is a big expense in your household, you might want to look into a credit card with cash back rewards for gas purchases. You can also look at ways to reduce the amount of energy you use. Simple tips such as unplugging small appliances and electronics not in use and turning off lights when leaving a room can at least help offset the increase in energy costs. Given that high utility costs seem here to stay, take the opportunity to look at your personal finances and plan for the future.
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