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Don't think that cheaper gasoline prices will last long
Don't count on gas prices to stay down; keep looking for ways to conserve
Date published: 11/30/2008
THEY SAY that what goes up must come down. Do you believe it? I didn't till recently, with the precipitous decline in the price of gas. Commuters are used to everything going up--traffic, travel times and the costs associated with all the different forms of transportation. So the drop in gas prices came as a pleasant surprise to all of us. Now that we're off that stomach-churning roller coaster, many of you are probably wondering why we went on this ride in the first place. For decades, the price at the pump hovered around $1 a gallon, in defiance of the usual law that prices ratchet up over time. Then several tumultuous events took place--namely, the 9/11 terrorist attacks, Iraq and Katrina. In September 2001, the average nationwide price of a gallon of gas was $1.44. The price steadily rose over the next several years until 2005, increasing at a nearly steady rate from the invasion of Iraq in March of 2003 ($1.66) to Hurricane Katrina in August of 2005 ($2.53). As a result of Katrina, the domestic oil supply was seriously disrupted--we lost a quarter of our domestic crude oil production and 10 percent to 15 percent of our refining capacity overnight. Major Gulf oil pipelines were shut down, further complicating supply to the coasts. Besides disruptions in the domestic supply, several other factors contributed to the massive increase. There were disruptions in the worldwide supply and increasing demand from developing countries such as India and China. These factors combined to produce the unprecedented and dizzying nationwide price of $4.11 in July of this year (information from the Energy Information Administration). Then the bubble burst. The cost of crude oil is the single largest factor in the price of gas at the pump, accounting for about half the cost. Taxes and refining each accounts for another 20 percent, with the remainder being retail profit and distribution costs. Contrary to popular opinion, the oil companies have not been taking advantage of events
Date published: 11/30/2008
Our Economy
(posted by
beyondgreen
, Nov. 30, 2008 12:51 pm)
OPEC has us over a barrel literally. This past year the high cost of gas seriously damaged our economy and society as well. Everything, and I mean everything costs more now as a direct result of high fuel costs. From farming to manufacturing and shipping the costs were all directly passed on to us. Now that gas has come down a tad, have you seen the prices of groceries come down. NO! And, OPEC is planning more cuts in production to get prices back up. I just finished a new book by Jeff Wilson called The Man
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