The Price Of Gas Is Outrageous – And It Is Going To Go Even Higher
Share this Article
Does it cost you hundreds of dollars just to get to work each month? If it does, you are certainly not alone. There are millions of other Americans in the exact same boat. In recent years, the price of gas in the United States has gotten so outrageous that it has played a major factor in where millions of American families have decided to live and in what kind of vehicles they have decided to purchase. Many Americans that have very long commutes to work end up spending thousands of dollars on gas a year. So when the price of gas starts going up to record levels, people like that really start to feel it. But the price of gas doesn’t just affect those that drive a lot. The truth is that the price of gas impacts each and every one of us. Almost everything that we buy has to be transported, and when the price of gasoline goes up the cost of shipping goods also rises. The U.S. economy has been structured around cheap oil. It was assumed that we would always be able to transport massive quantities of goods over vast distances very inexpensively. Once that paradigm totally breaks down, we are going to be in a huge amount of trouble. For the moment, the big concern is the stress that higher gas prices are going to put on the budgets of ordinary American families. Unfortunately, almost everyone agrees that in the short-term the price of gas is going to go even higher.
When you are on a really tight budget and you are already spending several hundred dollars on gas each month, you certainly do not want to hear that gas prices are going to increase even more.
A lot of Americans are moving or are getting different vehicles just because of these outrageous gas prices. The following comes from a recent Mercury News article….
Katherine Zak, of South San Jose, is searching for an apartment near her new job at Facebook in Palo Alto, partly to cut down the cost of driving. Jeff Benson, of Raymond in the Sierra foothills, typically drives 60,000 to 70,000 miles a year and has traded in his 19 mpg Ford Taurus for a Fusion that gets 33 mpg. And David Thomas says his commute from San Jose to San Francisco is getting so expensive that he and his fiancee are hunting for a house near a BART station in the San Mateo-San Bruno area to shorten his commute and lower his $400-a-month gas bill.
The price of gas is going even higher even though energy consumption is sharply declining in the United States. Just check out the charts in this article by Charles Hugh Smith. Americans are using less gasoline and less energy and yet the price of gas continues to go up.
That is not a good sign.
Certainly any decrease that we are seeing in the U.S. is being more than offset by rising demand in places such as China and India. As emerging economies all over the globe continue to develop this is going to continue to put pressure on gas prices.
So just how bad are gas prices in the U.S. right now?
Just consider the following facts….
-The average price of a gallon of gasoline in the United States is now $3.53.
-The average price of a gallon of gasoline is already higher than $3.70 in Connecticut, Washington D.C. and New York.
-In California, the average price of a gallon of gasoline is $3.96 and there are quite a few cities where it is now above 4 dollars.
-In mid-January 2009, the average price of a gallon of gasoline in the United States was just $1.85.
-The average price of a gallon of gasoline in the United States has risen 25 cents since the beginning of 2012.
-Never before in U.S. history has the price of gasoline been this high so early in the year.
-The Oil Price Information Service is projecting that the price of gas could reach an average of $4.25 a gallon by the end of April.
-The price of oil just keeps going up. The price for West Texas Intermediate is about 19 percent higher than it was one year ago.
-The price of gasoline is also reaching record highs in many areas of Europe as well. For example, the price of diesel fuel in the UK recently set a brand new record.
-In 2011, U.S. households spent a whopping 8.4% of their incomes on gasoline. That percentage has approximately doubled over the past ten years.
But the price of gas is not the only thing making driving much more expensive these days.
All over the country, our politicians have been putting up toll booths. Most of the time these toll booths are going up on roads that have already been paid for.
After paying an outrageous amount for gas and after paying the outrageous tolls on many of these toll roads, many Americans wonder if it is even worth it to get up in the morning and go to work.
Unfortunately, a couple of new bills in Congress right now would reportedly allow even more highways to be made into toll roads.
It is almost as if they want to force us all to stop driving our cars.
America used to be the land of the open road, but that era is rapidly coming to an end.
Another thing that could put upward pressure on the price of gas is the situation in the Middle East.
Iran has already stopped selling oil to companies in the UK and France, and there is the potential that war could erupt in the Middle East at any time.
If war does erupt, or if commercial traffic through the Strait of Hormuz was interrupted for even a brief time, that would send the global price of oil through the roof.
Approximately 20 percent of all oil sold in the world passes through the Strait of Hormuz. If the flow of oil was halted, that would change the global economy almost overnight.
So is there any good news?
Well, there is one thing that would likely bring down the price of gas substantially.
A global recession.
Remember what happened back in 2008.
Just like we are seeing right now, the price of gas really spiked early in that year.
Eventually, the price of oil hit an all-time record of $147 a barrel in mid-2008.
But then the financial crisis struck and the price of oil fell like a rock as you can see from the chart below….
So could that happen again?
Certainly.
There are a ton of other parallels between 2008 and 2012.
In both years, we saw global shipping start to slow down dramatically.
In both years, the U.S. was getting ready to hold a presidential election.
In both years, many economists were warning that a great financial crisis was about to strike.
Back in 2008, the epicenter of the financial crisis was on Wall Street.
This time, the epicenter of the financial crisis will probably be in Europe.
Keep your eye on Europe. A disorderly default by Greece (and potentially even an exit from the eurozone) is looking increasingly likely.
But the problems in Europe are not going to end with Greece. The entire eurozone is going to be greatly shaken by the time this thing is over.
So yes, if we see another major global recession that will be great news for the price of gas, but it will be really bad news for the millions of people that lose their jobs and their homes.
Unfortunately, we live at a time when the world is becoming extremely unstable. The great era of peace and prosperity that we have been enjoying is coming to an end. The global financial system is going to experience a tremendous amount of chaos in the years ahead and that is something we will all need to prepare for.
For now, the price of gas is a major concern for millions upon millions of American families.
Someday, however, we will wish desperately that we could go back to these days.
|
12:36 pm
The "prosperity" of the 1980s and 1990s was an illusion. Sure, we all had our cars, boats, snowmobiles, and fancy clothes, but we also had our mortgages and credit card debt. So our net worth was close to 0. Now it's all crashing down. No one wants to say it, but our wage rates are set in China, and we will eventually be paid the same, minus the ocean freight.
1:05 pm
It is interesting to me that the writer comments on escalating gas prices across the globe, but never identifies what those other countries are paying. We just returned from Canada where prices began at $1.29 (CA) / liter, about $5.20 (US) per gallon. UK is still higher. This highlights one problem we have in the US; cheap fuel prices, compared to the rest of the world encourage us to live far from our jobs where we can have bigger homes at lower prices. A 100 mile commute to work is not unheard of in the US, but we are free to live and work where we choose. Those choices have consequences for the individual, for local government (we DO expect to have good roads) and for the environment. We collectively don't have the will to make wise choices in this area, we don't want BIG gov't to make regulations to control the waste we choose, so in the free market we so love, the economics will, in the end, be the determining factor.
1:05 pm
The main thing that would bring the price of oil down is open up more area for drilling, including the Gulf Coast and ANWR. Opening up areas for more drilling, and building more refineries would cause the price of oil to go down in the U.S,. But this administration and EPA are so anti-oil that;s not likely to happen.
1:11 pm
I thought the article would probably blame Obama.
1:27 pm
The price of gas/ diesel, will be the price, the government wants it to be . Welcome, again , to the world of Communism .
5:25 am
Idiot.
1:58 pm
Drill now. Convert vehicles to natural gas as much as possible. Solarize homes to the extent possible. Conserve……
3:36 pm
IT IS THAT MORON OBAMA'S FAULT.
YOU KNOW HE NEVER SAYS WHEN I TOOK OFFICE GAS WAS 1.89 AND NOW IT IS 3.50
THANK YOU MORON COMMUNITY ORGANIZER AND DESTROYER OF THE AMERICAN DREAM SO YOU CAN PAY OFF A FEW FRIENDS.
3:37 pm
IT IS THAT MORON OBAMA'S FAULT.
4:18 pm
In 2008 the price dropped when President Bush ended the executive dept ban on offshore drilling. There was also a double top on the chart for crude. I think this caused a lot of speculators to bail, dropping the price. When the price dropped, more speculators bailed, dropping the price more, eventually bringing the price of oil from $147 to $30 a barrel. If Obama ended his ban on offshore drilling, OKed the pipeline, and allowed drilling in Alaska, I think prices would drop immediately because the market would know the increased supply would bring prices down.
Another cause of high prices now is tension about Iran. If we drill more, prices would drop, Iran would make less money and be less of a threat to the oil market.
5:20 pm
I'd say the article blames Obama. I do too. He's too stupid to run anything. Never has, except the U.
S.
5:28 am
He'll get a 2nd term, so start eating your heart out any time.
http://www.intrade.com/index.jsp?request_operatio…
5:46 pm
Obama wants the price of gasoline higher. His policy is to make fossil fuels too expensive to use, even though there's nothing to replace them with.
1:11 am
Natural gas is coming too replace a number of diesel equipted trucks and some cars,GE last year ordered 25,000 chevy volts (plug in cars=electric) electricity is produced by solar,wind ,coal, nuclear,natural gas,wind,hydro all of these replace crude oils .. Look up westport innovations on scottrade they singed deal with cummins engines this year.
6:07 pm
I heard recently that the US is exporting more of the processed fuel than ever before because the prices are so much higher in other countries as well.
1:17 am
You are correct US consumption is down and the oil companies were having too pay too store fuel reserves which in turn raises prices and takes longer return of monies,unfortunate but oil co's are obligated too shareholders get the best return as well executives stock options and performance bonus.
8:14 pm
Why should I coment? You never post them
8:16 pm
Compared to the Fifties, what is the REAL price of a gallon of gasoline? Compared to things I remember as a kid in the Sixties, gas is still pretty cheap. This country is addicted to petroleum. I know people that drive 4 blocks to go to work, church or school, and the number of kids that get rides to school instead of walking or cycling is sheer stupidity.
9:57 pm
None of you understand what is really going on. Just analyze US/Middle East history since WWII from the perspective of an American oilman who wants to maximize his profits. It costs him more than $40.00/barrel to get oil out of the ground and virtually nothing in the Middle East. The oil establishment has had over 100 years to gain control of both domestic and foreign policy. We are at war to keep the price of oil high, not low. Don't believe it? Just parallel the history of our political maneuverings with an oil price chart. The biggest lie of all is the Saudi oil cartel. The Saudi elite wouldn't last a year without our support and they know it. They are actually at our beck and call. Same for Israel. The biggest thing they have done is preventing an oil pipeline from going through Lebanon. The Europeans have to get oil through the Suez Canal while Egypt is our 2nd biggest (after Israel) recipient of foreign aide. And every time the price of oil drops low, there is some kind of Israeli/Arab conflict. Isn't it nice to be paying $4.00 at the pump and trillions in taxes for the military while watching our kids die in combat so our oilmen can get even filthier rich?
4:38 am
I think so many of you are just uninformed. Obama doesn't set the oil and gas prices on the world market. These rising prices are not due to supply and demand. We have produced more oil and gas than we have in years and we have, in part to our mild winter, a large surplus but prices are going up not down. Speculation, global fiscal and military worries and oil company greed seem to be a reasonable answer.
6:20 am
Ha ha, do you think $ 3.50 is expensive? Come to Norway, and I will show you what's expensive!
10:54 am
The price of gasolene, diesel and oil that they come from, is set by the world market.
Think gold, the US is a major producer of gold, but just because it is mined in the US doesn't mean you get it any cheaper, oil is the same way.
8:52 pm
When I was 17, I drove my old 59'Chevy to Fla..I had a $20 bill in my pocket. (this was in 67') That bought gas to drive from southern VA. to central Fla.! In a 283 c.i. v-8 car.! Two yrs. ago I drove my Chevy Van from S.C. to Fla. and it cost me $140.00 bucks! The mileage was 550miles! That is insane! Now I'm stuck,can't visit son's. The round trip now would probably be at least $300.00! I told my son the only I could come and see him was if I moved back up there! I keep my old van because I figured the way thing's are headed,I'm going to be LIVING IN IT soon!