Russia's invasion of Ukraine has brought pain and suffering. For Ukrainians, the dangers are of a mortal nature. For those thousands of kilometers away, they are financial.
On March 8, US President Joe Biden announced a ban on the import of Russian oil and gas.
"This decision today is not without costs here at home. Putin's war is already hurting American families at the pump – and this will drive up costs further. So, I will take every step we can to minimize Putin's price hike here at home," Biden tweeted.
The same day, US fuel prices hit a new high, crossing the previous record of $4.11 per gallon, reached in July 2008.
One US gallon is equal to 3.785 litres.
On March 15, fuel cost $4.32 per gallon in the US, on average, according to data from the American Automobile Association. However, in the state of California, the average price was $5.75 per gallon.
The surge in fuel prices has revived a consumption debate that puts the younger generations – and perhaps more liberal on the political spectrum – in the cross-hairs of their elders.
"The national average for a gallon of gas is $4.17. A gallon of Starbucks coffee costs $16.80. Just saying," a Twitter user tweeted on March 8. The tweet has received over a hundred thousand likes and 20,000 retweets.
If it's the drinkers of espressos, cold brews, and macchiato attracting the ire now, previous years have seen consumers of a supposedly hipster food item come under fire.
In 2017, Australian real estate mogul Tim Gurner took aim at avocado toast, arguing that such luxuries were the reason millennials struggled to purchase a home.
"When I was trying to buy my first home, I wasn't buying smashed avocado for $19 and four coffees at $4 each," Gurner said on Channel 9's 60 Minutes Australia. "We're at a point now where the expectations of younger people are very, very high."
There has been similar talk in India's corridors of power.
In September 2019, Finance Minister Nirmala Sitharaman blamed the slowdown in the automobile sector on India's millennials and their preference for ride-hailing cabs rather than committing to monthly installments towards buying a car.
Sitharaman, to be fair, was citing the findings of a Deloitte study, which found that younger consumers are "more likely to question whether vehicle ownership is a necessity than older generations".
Alterations in consumption patterns due to rising financial constraints have been rather apparent during the pandemic. The Reserve Bank of India's latest Consumer Confidence Survey, released on February 10, said an increase in household expenditure was because of greater spending on essentials. Sentiment on non-essential outlay, the central bank noted, "remained subdued".
In January 2021, a State Bank of India (SBI) research report had called for an "urgent cut" in the excise duty on fuel products as data from SBI credit card spends showed non-discretionary expenditure had risen to 65 percent of total card spends in December 2020. While this was a level similar to prior to the pandemic, the increase was "only because of fuel spend" as spending on oil had crowded out spending on discretionary items.
Coffee may be more expensive than fuel, but they serve different purposes. And consumption choices are not an excuse for higher inflation.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
