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Rising Oil Prices Choke Economic Recovery

In Business, Economy, Opinion, Uncategorized on February 28, 2012 at 8:42 am

Gery L. Deer, Deer In Headlines

In July of 2008, gas prices hit an average all time high in theUnited Statesof $4.11 per gallon. By November of that year, however, the price of regular unleaded fuel fell to $1.79 per gallon. According to the auto club AAA, as of Tuesday, February 28, the average price of gas inAmericahit $3.71 and is still rising.

According to government officials, including statements made by President Obama, there is no one reason why fuel prices take us on this sickening roller coaster ride. And, though political candidates promise to change things, there is no clear way to lower fuel costs or prevent their upswing because there are too many variables causing the problem.

Some blame speculation in the market, when certain investors make a profit from the rise in prices of various commodities, like oil and grain. Politicians will lay the responsibility on their opponents or some middle-eastern government bent on crippling the Western World. Still others will blame the oil companies for the sticker shock.

Often an accident or shut down in a refinery is blamed for a price jump at your local gas station, but it ends up being more of an easy excuse for price gauging. Oil companies have so much fuel already produced and either in transport or storage it would actually take months for any change in their revenue to be felt so sharply as to require a price change at the consumer level. Oil companies will use any excuse to raise prices and enhance profits.

People have repeatedly asked the government to step in but not much is happening to that effect. Congressional power players, worried about donations to their next campaign, are unlikely to create any legislation that would anger the oil companies.

Oil and gas executives spend millions of dollars every year donating to the campaigns of friendly congressional candidates on both sides of the aisle – yes, Democrats take oil money too. Add to that the idea that members of congress get reimbursed for fuel and travel costs – by us – so it’s unlikely that any fluctuation at the gas pumps would even be on their radar.

Whatever the reason and however unwilling our government officials to act, we still have to get where we are going. And for most, ditching the minivan in favor of some over-priced, underpowered hybrid or electric car is simply not an option. So what do you do?

My best advice is to take some personal responsibility and try to drive smarter. Basic fuel conservation tips still apply today: don’t let the car idle any more than necessary, drive at the speed limit, try to consolidate your driving into round trips rather than short hops and keep an eye out for the best possible gas prices. In short, a little common sense can go a long way to stretching your gas-buying dollar. Also, if you have the option, leave the SUV or other large vehicle at home.

At a time when Americans are struggling to get a leg up after years of recession and record-breaking unemployment, the pain at the pumps is going to be felt in many more places than the gas tank. Gasoline, jet fuel and diesel are required in the production and shipping of every consumer product from toilet paper to a gallon of milk, so when oil prices rise, so does everything else.

Unfortunately, household incomes are not adjusted to this type of inflation. Families already struggling to make ends meet are pinched even harder and those out of work will have a tougher time getting to job interviews, all because of rising fuel costs. So, the economy remains depressed and any growth touted by the government is even more unrealistic than ever. What happened to that hope and change we were promised?

 

 

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