Gasoline prices set new record (+ $.73 in 1 year, car travel same level)

[sabra]

http://www.usatoday.com/money/industries/energy/2005-08-22-gas-prices-usat_x.htm

Gasoline prices set new record

The average price of gasoline rose 6.2 cents last week to a record average of $2.612 a gallon, the government said Monday. Prices have climbed 73 cents from a year ago.
No major retreat is likely in the next two weeks.

Yet Americans remain largely undeterred in their travel habits. Motorists club AAA predicted Monday that the number of Labor Day travelers will rise slightly from last year.

"We've seen record high gas prices, an early start to the hurricane season, terror attacks in London and continued weakness by the dollar, but Americans have traveled nonetheless," AAA CEO Robert Darbelnet said in a statement.

AAA predicted about 34.5 million Americans will travel at least 50 miles from home during the Labor Day weekend. Of those, 28.8 million will take a vacation in a car or truck, about 100,000 more than last year, AAA said.

[whistle]

1. 38.8% increase but the government has the neve to claim that inflation

...in the U.S. is in check!

[Justyce]

2. Not I.... I've canceled my

vacation plans. I wouldn't want the tourism industry to suffer, but on the other hand, I would love for enough people to cancel their trips & stay home to make a noticeable difference in gas sales....

[phantom power]

4. I don't think there's much "give" there.

I bet somebody's done a study on this, but my impression is that the vast majority of travel is not recreational. Even if everybody cut back on vacation/recreation travel, it's not going to lower anybody's price at the pump.

That isn't to say that there aren't major transportation inefficiencies in our society, but the bad news is that the changes which will make significant reductions in fuel use are the ones that will be painful. For instance, moving closer to work (if that's even possible). Reorganizing the locations of businesses to be close as possible to the resources they use. Again, if that's even possible.

A lot of people are going to lose jobs, or go out of business, before this kind of transformation is over.

[Mithras61]

5. Isn't that what the economists call...

inelastic demand? I'm asking because I really don't know, but my understanding was that when demand remains the same despite changes in price, demand is inelastic.

If I'm right that means there is a break point where the demand will suddnely go WAYYYYYY down...

[phantom power]

6. I believe that is correct, and the existence of inelastic demand is

one of the key fallacies of modern GOP "economics" (I use that word loosely). They talk blithely of economic adjustments, but "adjustments" in the case of inelastic demand can be catastrophic.

[lostinacause]

11. Regardless of the harm that is caused the adjustment had to be

made at one point or another. Intervention has often been just as harmful.

[phantom power]

13. This is a case where I think we'll all wish somebody had intervened.

I think the European example is instructive. They've had enormous taxes on fuel for a long time, and their economies seem to be doing well enough. And because fuel has been expensive for them, their economies are also better adjusted to the coming price increases. Furthermore, they even have the option of lowering their taxes, to help buffer the prices. I don't know if that's the best option, but at least they have it. We sure don't.

[lostinacause]

15. The reason why the gas tax is so high in Europe is because of

a high population density. The pollution and crowd associated with driving makes it so that it is necessary to provide a disincentive for driving. They are in this situation because it suited other policy goals.

[phantom power]

16. Be that as it may...

We could also have chosen to apply larger taxes to fuel. And we'd be better off now if we had.

Or, we could have closed the "light truck" loophole in the CAFE regs 20 years ago, and we'd be better off now. Or, we could have invested in more public transportation. Or, we could have taken a stand against urban sprawl.

But really, if we had done the first, the others would have happened more naturally on their own. In an environment with higher fuel costs, light trucks, and urban sprawl would never have become the massive problems that they are today. There would be more people in urban environments, and they would be using more public transportation.

And we know, contrary to GOP fear-mongering, that it would not have resulted in horrific economic doom. We know this because Europe did it. Our economy would have grown more slowly, but that's preferable to the upheaval that's currently bearing down on us.

[lostinacause]

20. I don't know if we would be better off now. It is possible that the

lower growth rates could have had a negative effect when compounded throughout the years. With this being said it is likely that American consumers don't pay for the costs associated with driving in their gas tax. If this is the case then the tax should be raised.

Regarding the regulation on light trucks; I do agree with you. Standards should have been adopted such as they were with cars.

I don’t believe that it would have been advantageous to increase the tax to the level Europe is at. The trends have said that the prices are eventually going to increase. All that was necessary was to plan accordingly early enough. Steps that are being taken now should have been taken 5 years ago.

[lostinacause]

9. Yes, this is inelastic demand.

And as time increases people will start to make the transitions as necessary. Many analysts say that increasing production and refining cost in addition to peaking oil supply will only cause oil to get more expensive though. High oil prices are something that the economy will have to deal with.

[pitohui]

19. sure ppl cut back all they could cut after 9-11

who takes a sunday drive or does any unnecessary driving any more

there is nothing more to cut back

people haven't driven for entertainment in years

people drive to get somewhere they need to be

[mccoyn]

8. I agree from personnel experience.

I recently bought a home and considered living near where I work. I eventually did that, but it was not for money, but for health, free time and a bit of environmentalism. Why wasn't it for money? I'm paying higher mortgage payments because I live in the city. If I found a place 10-20 miles outside the city, the savings on my mortgage payments would easily cover the gas costs even at $4 or $5 per gallon.

We live in a cheap energy economy and the cost of transitioning to an expensive energy economy is huge.

[Yavin4]

3. Globalization = Higher Energy Prices

In the mad rush for th $1 an hour laborer, the geniuses of rampant, unchecked global capitalism forgot about the effect on energy prices. My guess is that those Chinese factories probably are not all that energy efficient becuase building in such efficiences would cost a little more.

IOW, we'd better get use to the $5 a gallon gas price.

[lostinacause]

10. Given that America produces much less then it consumes it is only because

global trade that prices are as low as they are.

[mike_c]

7. I cut my car use over a year ago...

...and now bicycle or use public transportation for the majority of my routine travel, e.g. commuting, minor trips to the store, and so on. We need some fundamental changes in the way Americans address issues like commuting-- our social infrastructure is BASED on far-flung distribution, separation of living and working environs, etc. That is just NOT sustainable unless we find a non-petroleum based way to do it, or a way to avoid everyone using gasoline to transport themselves individually and a 2000 lb vehicle all over the landscape every day. It simply cannot go on indefinitely.

[phantom power]

17. Busses are probably going to be most effective in the near-term

Busses can be deployed on the existing road infrastructure, without having to build massive new infrastructure for things like light-rail.

Local Phoenix news did a segment on the upsurge in bus use since the gas price hikes. It was very encouraging.

[lostinacause]

12. I have reduced my driving and am considering getting a more efficient car.

[ladjf]

14. 12 cents per gallon in Venezuela.

[pitohui]

18. yep that's why we're picking a fight w. venezuela

there is plenty of supply so market has to be artificially manipulated by fear & threats to keep prices this high

we're looking at price-gouging pure & simple

if the people ever catch on to how they're being gouged, the backlash could be huge

fortunately for bushco, people are sheeple, most of them

even on du, we see the peak oil hoax pushed to keep gas prices artificially high & make war profiteering more profitable for bushco

catch a clue train, folks

spreading the peak oil meme is very profitable for the GOP

[daleo]

21. If gas is more expensive, and people are driving just as much

They must be spending less money on something else.

If the average driver drives 15,000 miles per year, at about 20 miles per gallon, an extra 73 cents per gallon would work out to about $550. That's about a week's gross pay at 14 bucks per hour.

[Roland99]

22. They're spending their tax cuts...the money goes to the oil companies.

Rather cunning of them, eh?