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.
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Reader Comments (Page 1 of 1)
3-13-2008 @ 7:09PM
Rex said...
So it is expected to go up by almost 2 dollars in just the summer months? Gas here is CO is 2.93 a U.S. Gallon. They predicted it would get over 4 here last summer and it never went over 3.40. Please tell me when it actually gets close and then I might believe it.
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3-14-2008 @ 7:49AM
VW JUNKY said...
Diesel just hit 3.98 today near my house here in NC. Granted this station is a bit higher than some but still. Reg is still aroung 3.29.
later
3-13-2008 @ 7:41PM
ryan said...
Please keep in mind that it really isn't crude oil that is rising at alarming rates. The American dollar is losing value by the day. The yen just broke into the 90s, a feat which has not happened since the 1995. As the dollar loses value, everything that relies on something outside of the U.S. will cost more. In other words, pretty much everything is going to keep on getting more expensive before it gets any cheaper.
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3-14-2008 @ 3:24PM
Jonathon Morgan said...
Totally true. But dropping $50 every time I fill up my relatively small, efficient (ish) car still sucks.
3-14-2008 @ 6:29PM
CosmicPerk said...
WE HAVE A CHOICE!! The oil futures market is driving the current spurt to record high gas prices. MAKE THEM PAY FOR THEIR WILD SPECULATION!! Just buy less gas. Take fewer auto trips. Car pool. Use the bike. Walk. There will soon be a glut of oil. Lower fuel demand will cause the oil futures market collapse from this absurd level. A return to more reasonable fuel prices WILL occur. Of course, those who speculate on $5/gallon gas will lose their shirts.
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3-15-2008 @ 2:46PM
Ronald Pelletier said...
NOTICE TO ALL AMERICANS.....The increduble greed by the petroleum ,and their power over the government is the ultimate in oppressive control. the military down to the moped rider, will remain helpless , unless we as americans STOP IT ! 200,000,000 people can stop, turn or redirect anything. energy runs the country !!! not gov'ts .. We are spending 60,000,000,000 dollars a month in Iraq... THAT'S RIGHT 60 BILLION... THIS IS A FACT...Sadly the actual dollar figure is is 3 times that amount...GREED CARES FOR ONLY THE GREEDY.. They know exactly what they are doing to americans... Stopping america one car at a time, until we are an immobile, scared,hopeless,... When do we stop it ? When gas hits $20/gal [and it will]... Remember this!! All things have their limits.. 200,000,000 people not going to work for one day, will get their attention....If not, then two days....Its not much time ...48 hours to change direction and policy... Stop using their product for two days.. 200,000,000 pioneers for change, not in the future....NOW
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3-15-2008 @ 5:45PM
justin said...
Gas in Seattle is $3.58, I am not looking forward to this....
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3-15-2008 @ 11:49PM
cheryl said...
why not have everyone not buy gas on a Wednesday for the rest of their lives....that should help the price of gas to go down
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3-19-2008 @ 1:59PM
essarebee said...
It is the dollar's declining value, negative speculation, and lack of confidence that has the largest hand in increased fuel costs. And by the way, oil companies aren't necessarily greedy and don't make a very large profit margin at all. I won't give figures but they are readily available via quick internet search. The margins are much slimmer than most products. Fuel taxes, however, are astronomical! Check it out yourself and see how much oil companies pay in taxes. These companies are not just gasoline companies, but they are actively searching for alternative sources of energy as well as oil drilling locations. Why is it that we aren't drilling in Alaska? How about our own vast oil resources here in the USA?
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