Gas price blues

I just can’t resist adding my two cents about the current gasoline price hikes. Basically, I think we’re all getting the wrong end of the stick. Just last week, I gassed up in the morning—it was $1.45 per gallon. On the way home, at the same gas station, the price went up to $1.47. There’s no question that the oil producing countries—our "friends," our "allies," our "strategic partners"—are all giving it to us.

I remember last year at this time I was on the Ohio Turnpike and saw gas selling for $.75 a gallon (!) and also remembering listening to the radio with "knowledgeable" economists saying that because of the glut, oil prices wouldn’t rebound until 2007 or 2008. Most economists can’t predict more than a day ahead but I believe there still is a glut—it’s just that the oil is still in the ground. So in a year’s time, crude oil has gone from $11 a barrel to $34 a barrel. I knew things smelled because last year, when they announced the first of the price increases, gas at the pump went up immediately—even though it would take a few months before the higher-priced oil made its way to the gas pumps.

And so the same thing is happening today. Gas prices are going to continue to rise, even though as a "gesture" our so-called friends are expected to announce an increase in production so that oil prices will stabilize around the $25 a barrel mark. Theoretically, gas prices at the pump should drop. I don’t believe they will because the oil companies are in cahoots with them just as they were in the 1970’s. Heck, even the no-brand gas stations now have a much smaller spread between the brand-name stations than they used to.

Anyway, the only way we can fight back is to use less gas. There are e-mail messages circulating urging people to not buy any gas on April 7 and 8. This could be hard to do for those who must commute, but I will definitely do my best to do so. There are ways to save money on gas right now—drive slower and drive less—but to save money consistently typically requires the purchase of a more efficient car.

You’d think that rising gas prices would affect new car/truck sales. They haven’t. In fact, for the first two months of this year, rates were ahead of last year’s record pace. I suppose people who buy trucks and SUV’s will start to take note when it takes $40 to fill those tanks up.

So, even with the expected rise in production, don’t expect gas prices to drop dramatically, if at all. The only way that’s going to happen is if the oil-producing countries get greedier and start pumping more oil on the side, outside of their self-imposed quotas. That’s called "leakage" in the oil business. Personally, I look forward to the day when the world doesn’t have to depend on oil and the oil companies.