What Causes Gas Prices
Finally, someone has explained how our gas prices get set. Unfortunately, it doesn’t give me much hope for future gas prices. However, I’m glad to see that at least part of it is due to speculation which means that we may at some point at least see the price level off if not go down.
May 29th, 2008 at 8:51 am
This article skips over one of the most important reasons that oil, and therefore gasoline, are more expensive. The growing demand for energy throughout the world. China and India have economies that are growing at an explosive rate, have huge populations and need more energy.
On top of this the political instability of some countries with large amounts of oil, such as Nigeria, and our difficulties in dealing with some countries, such as Venezuela and the oil supply for us and the rest of the world becomes very problematic.
Gas is not going to go down. It will only continue to go up. Get used to it. Drive smaller cars, drive less, walk more, do everything you can to conserve on your energy usage because the costs will continue to go up.
May 29th, 2008 at 2:20 pm
We don’t really disagree here. I should have put more context in my post. My point was that in the short-term we may see some of this spike that we’ve had lately rebound or level off. There is speculation built in to the current price of oil, and I expect that we’ll have a “bubble” at some point. This would lead to short-term falls. I’m not an economist, but I don’t believe that the huge price jumps we’ve seen lately are all that realistic.
However, in the long-term I think we have to do something else. For various reasons, not all environmental, I think we need to look for something beyond oil.
Biofuels are not a likely answer as we’ve seen lately, though I think that there may not be as direct correlation between food shortages and biofuels as some would like you to believe.
I don’t have a good answer but I’m all for more fuel efficient vehicles and energy conservation. We’ve been talking about it a lot lately around our house.