Gas to climb to $5 a gallon by Labor Day
When we invaded Iraq, I was reminded of the Gulf War and thought, "at least gas prices will go down." Ha, haha, ha. Somehow that didn't happen but without going into the politics of who is getting rich over the war, let's look at what's going to happen to the U.S. economy if gas reaches $5 a gallon by Labor Day, as predicted.There are three major factors that go into pricing a gallon of gasoline; cost of crude, refining expenses and state taxes. The cost of crude oil went from $85 to $100, a 30% increase over the past few months. It is expected to keep rising. Refineries are looking to increase their profit margins and are even closing some plants in order to save money. This reduces capacity and increases prices. Finally, states are looking to offset losses from falling property and income taxes by tacking as much as 20 cents per gallon onto what fuels your car.
A five dollar gallon of gasoline would mean increased spending for the average family just to go to and from work and school. Effects of this would include fewer trips to the mall and the general need to "tighten the belt." In a consumer driven society, that's not such a good sign. Additionally the cost of goods would continue to increase pushing us into a period of sharp inflation. This is one of those days that I am glad that I live in a city and can walk just about everywhere. Buying a bike might be a good option, too.
Comments [9]
5 Endangered Species and How You Can Help
Should I Be Afraid to Drive My Prius?
How to Compost in Winter
