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Tri-State governments deal with impact of skyrocketing oil prices

Butler County Engineer's Office works on repairing roads
Posted at 11:09 PM, Mar 08, 2022

HAMILTON, Ohio — President Joe Biden's ban on Russian oil imports will likely result in even higher gas prices. While Tri-State residents are already paying more than $4 per gallon at several gas stations, rising prices will impact more than just drivers.

Janet Harrah, an economist at Northern Kentucky University, said the ban will also drive up the price of items people buy on their weekly grocery trips. Harrah said she is especially worried about the rising price of food.

"Russia and the Ukraine together account for more than 30% of the world's wheat exports, a large percentage of corn exports and a large percentage of the nitrogen exports needed to create fertilizer. All of those things are going to fuel food inflation," Harrah said. "I fully expect by the end of this year, food inflation will be double digits."

Harrah said this will undoubtedly impact low-income families who are already struggling because of the pandemic. One solution to this, she said, could be for the federal government to pay farmers more to grow more food locally. That could offset gas prices for equipment and the cost of fertilizer, which is created by using fossil fuels.

These prices will no doubt impact regular consumers, but they will also put the squeeze on local governments. Butler County Engineer Greg Wilkens said he has already had to make changes to the county's plan to resurface several streets.

"Oil runs through the construction industry in almost everything we do," Wilkens said.

Wilkens' office depends on license plate and gas tax money to keep it running, but he said it's hard to plan for anything when prices keep rising and revenue is stagnant.

"You try to watch and you plan and you look and you run two and three different budgets," Wilkens said.

Now, the county's $9 million budget to resurface several roads might not be sufficient because of skyrocketing oil prices.

"It's a major component of the asphalt in our resurfacing project," Wilkens said. "You put that up 30% and that's quite a hit."

Wilkens said his office had to drop two routes they planned to resurface because of price hikes. A worker said 95% of the county's fleet uses diesel fuel. AAA reports diesel gas is at $4.75 a gallon. Plus, smaller projects like sealing up cracks in asphalt using a petroleum byproduct could suffer as well, creating a domino effect of bigger and more expensive issues down the road.

"Now any of the surplus money we got is now going to be consumed into making that happen," Wilkens said.

Wilkens said roads need to be resurfaced about every 17 years. Some in the county are toward the end of that timeline, but if they're pushed back too far, Wilkens said it could cost five times more to completely rebuild the road than it would cost to resurface it.

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