Pain at the Pump (Gas heading back to $2 plus prices)

[RamboLiberal]

http://www.msnbc.msn.com/id/5612975/site/newsweek/

Think you’re paying a lot at the pump now? Just wait. In the past year, gas prices in some cities have already increased by 50 cents a gallon or more. And experts say they haven’t topped off yet. This week, the price of crude oil, the major cost component of gasoline, reached a record high of more than $44 a barrel—about $15 more than a year ago. By Labor Day weekend, a barrel could top $50—and filling your gas tank could cost as much.

Why the ever-escalating prices? Blame it in part on the fact that, well, we like to drive. Despite the rising costs, U.S. demand for oil and related products such as jet fuel and gasoline has kept on growing even as suppliers struggle to catch up. The second-quarter increase in U.S. petroleum demand was the largest in more than three years. And higher gas prices seem to have had little, if any, effect on Americans’ driving habits. “This is one of the biggest driving seasons we’ve seen in a decade—certainly the biggest since 9/11,” says Geoff Sundstrom, spokesperson for the Automobile Association of America. “Americans don’t curtail travel due to price of gasoline—especially summer vacations.”

Instead, consumers have compensated by cutting their spending back in other areas. In June, when gas prices last spiked at about $2 a gallon, personal spending fell 0.7-percent—the steepest monthly decline since September 2001, according to the Commerce Department, which released the data on Tuesday. Sales at the nation’s retailers also slipped in June by 1.1 percent—the largest decline in 16 months. (Auto and retail-store sales improved slightly last month; overall personal spending data is not yet available.) The economy overall grew at a somewhat slower than expected pace in the second quarter, too: the gross domestic product, which measures the value of the country’s goods and services, rose at an annual rate of 3 percent in the second quarter, down from a 4.5 percent rise in the first quarter. “Higher gas prices have some impact on consumer spending—it takes away from purchasing power,” says Henry Willmore, chief U.S. economist at Barclays Capital.

[Nambe]

1. Can I sell you an 800 watt Hub motor for you bicycle?

Twenty miles at twenty five mph for 7 to 11 cents a charge.

Or would you like to buy my SUV.
Ride Don’t Drive It’s Global Cool

[HuckleB]

9. Nice. But please wear a helmet!

:)

[denverbill]

2. 'Blame it on "we like to drive"????

That's goofy. I haven't cut back on my driving because practically the only time I drive is to work and back. Taking a bus would change my 45 minute commute to about a 2 hour commute, so that ain't going to happen. I dunno, maybe there are tons of people who just drive around aimlessly for the fun of it, but I think for most people, they don't drive 'because they like to'. They drive because they have no decent alternative.

Now, as to why any idiot would drive a 3 ton SUV, that's another story. If 1/2 the SUV owners in the country switched to basic mid-size cars gas prices would be back where they were under Clinton.

[hadrons]

3. prices in NYC never left $2.00+ ....

lucky I don't drive, so I haven't taken a direct hit although I know the indirect/pass-along-cost hits will be coming soon

[russian33]

4. heading back?

I'm excited about $2.15 a gallon here in new york

[DemWitch]

5. upstate NY managed to get all the way down to $2.03 a gallon...

$2.00 a gallon will be highly accepted!

[Rockholm]

6. Glad I filled up @ $1.99 yesterday in Boston!

[northzax]

8. in the DC area, we got all the way down to 1.97!

and (to the previous poster) higher prices do reduce how much people drive. People begin to combine errands (do you drive to target for one thing and then go home, or do you stop off at the grocery store, the video store, etc, all on one trip? people do it, even subconciously.)

[benburch]

7. I love my Prius more every day.

Indicated mileage for the last week is 47.5 mpg on my 2002 Prius.

[TommyO]

11. This is why I bought...

a VW Jetta TDI three years ago, and am still loving it today! In NJ, where I typically buy my diesel fuel, it's around $1.69/gallon and I get 45-52 miles per gallon highway. I'm soooo glad I fought the urge to buy even a small crossover SUV like the Honda CR/V!

[HuckleB]

10. The Death of Cheap Crude -- an interesting piece.

http://english.aljazeera.net/NR/exeres/416F7BA6-90FC-48E6-8F4C-CA30FDD6EB39.htm

[tedoll78]

12. I hate to say this, but..

hooray! Maybe my fellow Americans will learn to vote more intelligently in the future, hmmm? Candidates who support alternative energies instead.. rather than the old 'garbage-in, garbage-out,' hmmm?

[lazarus]

14. You think that'll make a difference?

There's a strong correlation between gas price and who the state voted for in 2000.

Of the ten cheapest states, 9 voted for Bush. Of the ten most expensive, 7 (IIRC) went for Gore.

[arwalden]

13. Prince George's County, Maryland (DC Burb) The Price Never Went Below $2

at the stations that I go to.

[depakid]

15. Will the oil companies say no to gouging

and sacrifice their record profits to keep their patrons in power? or will they use the Yukos affair and the Texas City refinery fire as yet another set of excuses to grab what they can before the election?