Oil is sold at a world wide basis. The only reason gasoline is as cheap as it is, is due to the fact the IS has had a 12% decline in oil usage since 2008. Without that drop in usage, the world wide price of oil would be eight to ten dollars today (Someone would have stop buying oil as the price went to high, it was just that the US is the most dependent on oil and thus where a price increase will lead to a reduction in usage first).
Think about it, In many a third world countries where people go by foot or animal power, they are items they are willing to pay top dollar for. It may be something small, but valuable to them. A bag of rice for example. If it takes a truck to haul that bag to a Central location (thus spreading out the cost of using the truck) you can spread the cost of the truck over many bags of rice. A one ton truck may get only 10 miles to a gallon, but if the bag of rice is 20 pounds, that means 100 bags of rice is on that one ton truck. Thus if a village is five miles away, and everyone agrees to pay $1 for the fuel to get the truck to the village, that village has indicated it would be willing to pay up to $100 a gallon of gasoline so each of its 100 families could get their 20 pounds of rice.
Most third world countries are NOT so desperate as to be willing to pay $100 a gallon of gasoline, but I use the story to point out that in many cases people will pay a higher value for something that gets them something their need.
On the other hand people will STOP paying for something they do not believe is cost efficient for them (Thus since 2001 we have seen a nation wide increase in mass transit usage, this has continued even as we cut support for mass transit).
The big question is how long with the Upper Middle Class permit this to occur before they ask the Government to solve the problem? In the early 1900s problem developed in New York City, people were tearing down their parent's mansions and building Apartment buildings in their place. Why? Because the poor were willing to pay more per square foot for housing then the Upper Middle Class. On the other hand the Upper Middle Class wanted their mansions to be next to other mansions not apartment buildings. The economic push was for Apartments, so people in that area of New York City had New York City pass the first zoning laws, to prevent mansions in their areas from being replaced by Apartment Buildings. i.e use the Government to prevent what Economic policy was causing, when it was against the interests of the Upper Middle Class.
I bring up zoning laws, for it was the best known example of people using their economic might to get government to restrict what the economy was doing to them. To get around Constitutional concerns, Zoning has had to be for everyone (Housing for the poor has to be included in the Zoning plan). The problem has been since the poor has little political power, zoning for them tends to be an afterthought (If not ignore all together till someone sues, then a slight change is made in the zoning plan).
The reason I discussed Zoning, for I can see similar restrictions being imposed on the American People to keep Gasoline prices low. If the US rations by price, the high prices of airline tickets due to the high price of oil, may force upper middle class people to have to cancel their trips to Europe. The reason for the high prices, to many poor Americans will pay too price for gasoline so they can get to work and keep their jobs. Rationing would solve this problem. Low oil prices and the poor will just have to find another way to get to work for they will NOT be allowed to buy gasoline.
Don't think the above is to far fetch, I remember the proposed rationing program of the 1970s. The Government was NOT planning to ration based on driver's licenses (for to many people who did not own a car but had a driver's license) but based on vehicles registrations. i.e if you had no cars, you received no coupons for gasoline, but if you own and had registered 10 cars, you would receive 10 packs of gasoline coupons, one for each car, even if nine of them did not work (but were registered). A Junker on the backyard would NOT count (Unless it was registered with a State, i.e had a license plate and whatever else the state required and even in the 1970s that included insurance and inspection) but the car without an engine, but had a license plate, registered with the State would count.
I use to joke Pennsylvania Safety inspections did not include the engine. The engine did NOT have to run to pass an inspection, the vehicle only had to have the following
1, Lights that worked, including turn signals
2. A horn that worked
3. Brakes that worked (PA demanded a visual inspection of the Brakes, when I was in Texas all that was required was a road test),
4. Good tires,
5. Good windows,
6. Good window wipers that worked,
7. exhaust system that was sealed and worked,
8, Shock absorbers that worked
9. Front Steering system that had worked
that is all. If the vehicle's engine did not turn over or transmission did not propel the wheels (Provided both were properly mounted), but everything else it would pass inspection, for all the state was concern was the vehicle was safe to operate NOT that it ran).
I bring this up for if oil does get to tight and you start to hear demands that people do something about not being able to find any gasoline to buy, demands for rationing will come back, this time as some sort of credit card type but with many of the same restrictions as in the proposed rationing of the 1970s.
= new reply since forum marked as read
