Local costs in Michigan rising from Russian invasion

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The people of Michigan have already seen gas prices rapidly increase due to the Russian invasion affecting oil and gas costs.

The impact of the Russian invasion has started to affect the people of Michigan locally as the takeover advances further into Ukraine.
One of the first dilemmas that have taken place locally is gas prices increasing rapidly. According to the article “Russia’s invasion creating ripples in Michigan prices” from Fox 2 Detroit, Gas prices have already increased by a twenty-cent jump since Russia’s invasion last week, and prices are expected to grow as this storming of Russia continues.
“As we witness Russia’s historic invasion of Ukraine, its impact is branching out to our lives in America – most notably – gas prices,” Fox 2 Detroit said. “As of March 1st, the average price of gas in Michigan is $3.57, up a penny from the day before, and a .20 cent jump from last week before Russia’s invasion.”
Russia is the second-largest producer of natural gas and one of the largest oil producers, stated by CNBC in their article “Gas prices have spiked amid the Russia-Ukraine conflict”. Since oil prices are already tight, this could put additional pressure on gas prices. Fortunately, for the local people in Michigan, the rapid increase in gas prices should be a short-term effect of the Russian invasion.
“The biggest effect is really the energy prices and oil prices in terms of shocking customers and, all of a sudden, see that gas prices could be going up. To some degree, this is short-term. I can’t tell you what tomorrow brings,” CEO of Anderson Economic Group, Patrick Anderson said in an interview with Fox 2 Detroit.
With the rise in gas prices, not only will this affect local drivers, but will also increase the cost of business shipping and manufacturing in Michigan.
According to “Rise in gas prices impacting Mid-Michigan businesses costs, services” from the website WILX, businesses are now having to raise their delivery prices and services since the costs in materials are going up. This surge in prices could lead to a decrease in demand for these local businesses.
“It’s not just shipping, it’s also manufacturing,” an associate professor of marketing at Michigan State University, Dr. Ayalla Ruvio said in an interview with WILX. “There are a lot of things that are made from oil, so everything will get more expensive.”
Local food prices are also expected to rise in prices due to the Russian invasion since the region is one of the world’s largest producers of wheat and certain vegetable oils. As stated in the article “Russia’s invasion of Ukraine will likely ratchet American food prices even higher, experts say” from The Washington Post, this increase in price for local stores is expected to go on for months or even years, compared to the short-term gas prices in effect.
“American Bakers Association President Robb MacKie said consumers will start seeing rising prices in anything that has grain in it — wheat, corn, oats, barley, rye — because the grain markets ‘are all tied to each other,” The Washington Post said. “That could mean higher prices on breads, beer, cereal, and animal feed, among other things, impacting billions of dollars worth of products.”
Overall, the local people in Michigan should expect short and long-term effects as the Russia-Ukraine conflict is still on course. According to Fox 2 Detroit, the biggest concern right now is how the economy in Michigan will react to prices increasing, which pushes up inflation in gas as well as food prices. Since this fight between the two countries is far yet from over, the magnitude of the economic fallout is still unclear.
“If you can’t buy from Ukraine and Russia, where do you turn to for supply? We don’t really know the answer,” the pricing analyst covering oil seeds and grains at Mintec, Kyle Holland said in an interview with The Washington Post. “Then where do people expect to import from? The fears are being stoked and we’re stabbing in the dark a little bit because of the speed at which this has happened.”