What's Up With the Price of Gas? That's Just It, It's Up!
Posted: Friday, June 05, 2009
by Steve Kovacs
The Kovacs Perspective
Here in the United States gas prices have been steadily climbing the last few months, but in the last few weeks, they have been skyrocketing. Today, where I live, in Northeastern Ohio , prices ranged from $2.45 to $2.75 a gallon. In some areas, mainly California, prices are hovering near $3.00.
Less than a month ago, they were below $2.00 and going back a few more months, they hovered around $1.75. What has happened? Did the world start to run out of gas this month? No, there is still plenty of the smelly stuff around. Did the price of crude oil, the product used to make our gas, skyrocket? No that price is still relatively low. So what's up with the price of gas?
Goldman Sachs boosted its forecast for Crude prices based on expectations that the economy will stabilize and OPEC production cuts will shrink global supplies. It now expects oil to cost $85 a barrel by the end of the year, up from its previous estimate of $65 a barrel. Why would OPEC cut production if the US and world economy is getting better? Could it be for profit? Speaking of profit, did you know the most profitable company in the US is Exxon Mobil? And yes, in case you do not know, they sell gas.
When gas prices substantially go up it costs more for people to drive to work, come to your home to repair your washer or dryer, or to truck our food to grocery stores. When gas goes up, people unquestionably spend less on other things such as food, restaurant dining, and products in general. Now, couple this with Chrysler slashing employment by thousands, GM doing the same, and companies in every corner of our country struggling more than at any time in recent memory and what do we have? Seriously tough times, is what we have!
Does Exxon Mobil care? Does OPEC care? Do our politicians care? Well, obviously Exxon and OPEC do not care. Politicians, at this time of our economic struggle, have to care. You'd have to be really out of touch not to realize that gas prices, now, have to be kept at moderate levels to get our economy up and running.
As I write this, President Obama is in the Middle East talking to many who are associated with OPEC. Most say he is there to deal with global issues regarding that region of the world. However, I believe, he also is there to address the rising cost of fuel and how they can make a difference in lowering prices. Let's hope I am right. Nevertheless, I hope someone takes an effective leadership role in a situation that seems to be spiraling out of control, again.
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Top-level comments on this article: (4 total)I hope the oil companies and OPEC care, and yet we should remember they are trying to make as much money as possible. Mr. Obama, hopefully, addressed this with the Saudis, since this is really the wrong time (as if there is a 'right' time) for more trouble in the economic sector.Well done, Steve.Thanks my friend!
Wow! Your gas is only $2.75 a gallon. In my part of the world (Alberta, Canada) we are paying $3.75 a gallon and that is cheaper than it was this same time last year. At that time it was around $5.20 a gallon. I also find that when summer comes the gas prices go up regardless of the price of crude. They say it goes up because people drive more in the summer and the demand for gas is higher than in the winter. They say that is 'supply and demand' but sounds more like extortion to me.Thanks for reading and commenting Dave. Yes, many parts of the world have much higher prices than in the US and have for years. In many of these countries this is because of very high gasoline taxes. However, in the US people have learned to adapt to prices at a general level--now prices are getting out of that range which will cause economic hardship. I liked your comment--"extortion", how funny and probably true!--Thanks for writing.
If I'm not mistaken, it was George W. Bush who invaded Iraq, under the auspices that they were developing nuclear bombs. None were found but he had killed Saddam Hussein anyways which @#$@#&*ed off the middle eastern countries. They, in turn, raised their prices of oil which caused the gammutting gas-price game. The American people chose Obama as president rather than Bush-clone McCain, who probably found more ways to @#$@#&* off the Arabs and everybody in America would have to use bicycles instead of cars when gas prices soared to six dollars a gallon. I believe Obama is the savior of this country and will find a way to quell the wrath of the Arabs (in a way that won't lead to the demolition of Israel) and gasoline prices will steadily drop. For that matter, I believe Obama will help many American crisi to steadily drop.Hey Mike--Thanks for writing. I hope someone solves the problem for us! I'm debating on buying a horse but I think I'll never be able to get it galloping fast enough on the highway!
Great article. Well done.In the UK about 60% of the price is fuels is tax. So why should the other 40% have so much power over the price. I think the government is piggy backing the fuel crisis to a degree.Thanks Connor--yeah, who knows what's going on with fuel across the globe. Probably different things in different countries. One day someone will invent something clean and cheap to use, hopefully soon.
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