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21 Mar, 2022 16:49 HomeBusiness News Empty shelves, price hikes, car shortages: Sanctioning Russia proves costly for the West Rising costs lead to hoarding and protests in parts of Europe
The unprecedented sanctions against Russia have pushed energy costs higher in Europe and the US, driving record inflation and making it ever more expensive for farmers and truckers to fuel their machinery, afford fertilizer or keep up with other costs. In Europe, which is dependent on Russian oil and natural gas, the sanctions have worsened an energy supply crunch that has driven up costs for households and businesses. RT looks at what life without Russia is like for the West these days.
- High energy costs trigger unrest
People have been protesting across the EU as the cost of diesel and gasoline has become prohibitively expensive. Thousands of truckers began an indefinite strike in Spain last Monday, leading to traffic jams and picketing across the country. A few truck companies in Spain stopped operating due to high costs resulting in job losses for some. In Italy, a liter of gasoline and diesel now cost more than two euros due to sanctions. France has also been hit with protests against soaring fuel prices. Hundreds of protesting farmers blocked traffic in central Athens to demand the government grant them additional concessions to cope with higher energy costs. In the US, consumers now have to pay at least twice as much for gasoline after Washington announced an embargo on energy imports from Russia.
- Empty shelves at grocery stores
The trucker strikes have caused supply problems that are impacting the food industries of entire countries. Images of empty shelves at grocery stores are becoming more common in Europe as supplies of basic foodstuffs and products have been affected.
- Governments warn against panic buying
Some retailers had to limit the sales of certain products to prevent customers from buying more than “normal household quantities.” Governments insist the supply shortages are a “hoax” and call on people not to panic buy. Experts say that uncertainty in the market is likely to continue, and that the situation could even worsen in the coming weeks.
- Skyrocketing food prices
Global food prices, which have already been surging due to the coronavirus pandemic, skyrocketed further amid the crisis in Ukraine. Russia and Ukraine are critical global suppliers of wheat, as well as sunflower, rapeseed, flaxseed, and soy used for cooking oils and in animal feed. Russia and Belarus, which also faces Western sanctions over the crisis in Ukraine, are key global suppliers of fertilizers. The resulting surge in fertilizer prices means farmers worldwide are facing higher costs to grow crops. In Italy, prices for pasta, flour and vegetables have risen sharply, with sunflower oil prices surging the most, by 19%. Data from the national agriculture trade organization, Coldiretti, shows that the cost of bread has almost doubled since November, to its current €8 per kilo. Some German supermarket shelves have been stripped bare of cooking oil and flour, as they were back in March 2020 when the Covid pandemic started. Most recently, the cost of cooking oil has risen significantly, with a cheaper bottle now costing almost €2, up from less than €1 just a few months ago.
- Global auto market in trouble
The Ukraine crisis has added to the pains suffered by automakers, who had been grappling with high prices due to Covid-related disruptions, including semiconductor shortages. This week major car manufacturers announced they will shut down plants in Europe and raise prices further as supply issues mount. In the United States, prices of used vehicles are currently far above historical norms amid a shortage of new cars and trucks. Russia and Ukraine are significant suppliers of critical commodities to the auto industry like neon gas, aluminum, platinum and palladium, and of components like harnesses. Auto market data provider S&P Global Mobility said last week that the Russia-Ukraine conflict and rising prices for commodities will result in five million fewer cars being built over the next two years.
- Europe’s anti-crisis calls
The prime ministers of Spain, Portugal, Italy and Greece met on Friday to call for an urgent European Union-wide response to the energy crisis to come out of the upcoming European Council meeting. The Spanish government says it plans to introduce measures against high energy and fuel prices later this month. The anxiety in Europe is exacerbated by the fear that Russia will eventually respond to Western sanctions by cutting off energy supplies to the continent, sending their economies into recession.
For more stories on economy & finance visit RT’s business section
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