Why Energy Prices Are Projected to Increase 50% in 2022 — After Doubling Last Year

Source: Foundation for Economic Education
by Jon Miltimore

“What has caused the surge in food and energy prices? Any economist will tell you prices rise and fall for all sorts of reasons related to supply and demand. But in this case we can find three primary reasons. The first, as the World Bank notes, is the war Russia initiated in Ukraine, which has disrupted trade and supplies of energy and food. In some cases, the authors note, it’s easy to spot examples of how disruptions in one commodity have rippled across the economy, such as how high natural gas prices increased the cost of fertilizer, which has pushed agricultural prices upward. There’s no question the war has had an impact — especially on European markets, where natural gas prices have reached all-time highs — but two other causes have received far less attention.” (05/02/22)