Wednesday, May 30, 2007

The price of gas

I know the only real way to lower the price of gas is to stop using it but the price increases have really hit hard. The current structure of our economy forces many people to rely on a car to do anything. We've all heard the numerous excuses about why prices are so high: supply/demand, terrorism, geopolitical risk, lack of refining capacity, hurricane, oil prices are high etc.

A few things that should be examined are the connection between the price of a barrel of oil and your local gas pump. I've done a brief review and I don't see them moving in tandem as much as the oil companies say. Well, at least they don't move down as much. Can our demand patterns change? Even with prices getting higher that doesn't seem to be declining. Will the prices curb economic activity? By the looks of it, only for those who can't afford it. I don't think hybrids will save the day either. The Prius may be a great car but unless you do your research you'll never hear about the batteries or the electrical components. Ethanol? Only designed to subsidize farmers and create the appearance of action.

Regardless, gas prices are high for one reason. They can charge whatever they want because we need it. Until we have alternatives, or the oil boom busts, prices are only getting higher.

1 comment:

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