Governments look for solutions as pump prices soar globally



Retail gasoline and diesel prices rose to record highs in many countries globally this week, prompting governments from South America in Brazil to Europe in France to consider pumping up subsidies or trimming taxes to shield consumers from the financial strain.

The moves reflect the economic and political risks governments see in the current energy spike, which has been driven by a rebound in fuel demand since the darkest days of the coronavirus pandemic and supply disruptions in the wake of Russia's military operation in Ukraine.

Many analysts expect the prices to soar higher however this is likely to slow down economic growth, force lower consumption.

Global benchmark oil prices were trading around $115 a barrel on Thursday, up from around $80 a barrel at the end of last year.

The United States on Tuesday imposed a ban on oil imports from Russia, the world's third biggest producer, as retaliation for Moscow's military operation in Ukraine, and Britain also said it would phase them out.

Analysts at JP Morgan Chase & Co and Bank of America have predicted disruptions to Russian oil flows could push oil prices to $185 to $200 per barrel.

In the United States, the average price for gasoline has already reached a record $4.3 per gallon this week. Pump prices could rise to around $5 per gallon in time for the Memorial Day holiday in late May, when the country's summer driving season begins to ramp up, according to a report from Reuters.

Many U.S. motorists are considering ways to cut other expenses to afford to pay for fuel.

In the United Kingdom, the average price of unleaded petrol at the pump rose to 1.58 pounds per liter, while diesel hit 1.65 pounds per liter, both record highs, data showed.