Messes with already tight state budgets
Gail Tverberg, 1-17-2013, retired US actuary and writer for Our Finite World, , "Ten Reasons Why High Oil Prices are a Problem," Our Finite World, https://ourfiniteworld.com/2013/01/17/ten-reasons-why-high-oil-prices-are-a-problem/,LMS
9. Government finances are especially affected by high oil prices.
With higher unemployment rates, governments are faced with paying more unemployment benefits and making more stimulus payments. If there have been many debt defaults (because of more unemployment or because of falling home prices), the government may also need to bail out banks. At the same time, taxes collected from citizens are lower, because of lower employment. A major reason (but not the only reason) for today’s debt problems of the governments of large oil importers, such as US, Japan, and much of Europe, is high oil prices.
Governments are also affected by the high cost of replacing infrastructure that was built when oil prices were much lower. For example, the cost of replacing asphalt roads is much higher. So is the cost of replacing bridges and buried underground pipelines. The only way these costs can be reduced is by doing less–going back to gravel roads, for example.