Gas prices rise due to turmoil in Libya

By Whitney Jones

While protests and violence plague Libya, Americans struggle with a resulting rising problem of high prices at the gas pump.

The Libyan people began protesting against their leader, Col. Muammar el-Qaddafi, Feb. 16. Qaddafi has held an iron-fist reign in the oil-rich nation since he took power after a bloodless coup in 1969.

Oil is a quarter of Libya’s gross domestic product, making the country the 15th largest exporter of oil in the world, according to the CIA’s World Factbook.

Dr. Walton Padelford, university professor of economics, said Libya’s main export is petroleum and that while most of the oil is imported to Europe, the United States also receives a large amount of oil from the troubled nation.

As violent unrest continues to erupt in Libya, average U.S. gasoline prices at the pump reached $3.52 per gallon March 7, according to the U.S. Energy Information Administration, which marks a 41-cent increase from mid-January. Gas prices have been escalating since the unrest in the Middle East began later that month.

Padelford said the rise in gasoline prices is due to the oil shortage caused by the shutdown of petroleum production during the weeks of turmoil in Libya. He said that even though Europe receives the most oil from Libya, the fear of an oil shortage spikes prices all over the world.

“There can be an obvious supply problem if those oil fields in Libya are shut down, which I understand they have been for the last few days,” Padelford said. “So just the pure shortage of petroleum, that’s going to make petroleum prices go up. But since we have a worldwide market for petroleum, and we try to get it shipped to different areas of the world, it would also affect prices here.”

Since Libya has had to shut down oil fields during the unrest, Padelford said other countries are going to have to step up and increase their petroleum production to make up for the loss.

“Because of the shutdown of the oil fields in Libya, it’s clear that they are out of the supply chain for right now,” he said. “Either Saudi Arabia or other countries are going to have to fill that gap.”

As the price at the pump rises, the conflict in Libya between the people and their government continues to heighten with violence.

Although rebel forces assumed control over the oil assets in the eastern part of Libya, government forces began an air attack March 7 on Raz Lanuf, dropping bombs near the city’s oil refinery.

After meeting with Julia Gillard, Australia’s prime minister, on the same day of the attack on Raz Lanuf, President Barack Obama spoke against Qaddafi for the violence being taken out on the Libyan people.

“I want to send a very clear message to those who are around Col. Qaddafi: It is their choice to make how they operate moving forward, and they will be held accountable for whatever violence continues to take place there,” he said.

The president also encouraged the Libyan people, saying the United States and Australia would stand up for their rights and support them in their protests.

“The bottom line is (that) Australia and the United States stand shoulder to shoulder in sending a clear message that we stand for democracy, we stand for an observance of human rights, and that we send a very clear message to the Libyan people that we will stand with them in the face of unwarranted violence and the continuing suppression of democratic ideals that we’ve seen there,” he said.

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