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Gas Prices Continue to Fall

Six months ago it looked like the price of oil and consequently the price of gas/diesel would continue to go ever higher, but it looks like that didn’t happen at least for now. I heard a quote by some so called expert that “the cure for the high price of gas, is the high price of gas.” I guess maybe he was correct. On our summer trip in August, I paid as much as $4.89 for diesel. That was about the time that the price of oil started to fall, so on our way home in early September the prices got cheaper the closer we got to home. The big oil bubble had burst, but that isn’t the only thing that went boom! The huge housing bubble brought on by our inept government regulators, also burst. So now we are paying less for gas but a lot of people without jobs don’t have money to buy the cheaper gas.

When the price of gas goes as high as it did, people actually change their driving habits. Because the prices have been so high, people began to drive less and use more public transportation. An article in the Houston Chronicle is titled “Driving decreases in U.S. despite lower fuel prices”. Between November 2007, when the driving decline began, and October, Americans drove 100 billion fewer miles. That’s the largest continuous decline in driving the nation has experienced. Transportation Secretary Mary Peters said, “the fact that the trend persists even as gas prices are dropping, confirms that American’s travel habits are fundamentally changing”. So hear is the rub! Peters expressed concern that the decline in driving is widening a gap between federal gas tax revenues and the government’s commitments to fund state and local highway repair and construction projects. “As driving decreases and vehicle fuel efficiency continues to imporve, the long-term viability of the Highway Trust Fund grows weaker,” Peters said.

So if we drive less, does that mean that our government will have to raise the Federal gas taxes on a gallon of gas to offset the decline in revenue due to fewer gallons being purchased? Might happen! That’s not the only effect of the falling price of gas, which is a good thing in my opinion. I heard someone on one of the financial stations say that some of the refiners might have problems due the falling price of oil. I guess he was correct as I just read that Flying J has filed for bandruptcy. I went to their website and as it turns out it is only the Big West refining and Longhorn Pipeline subsidiaries that are included in the filing. They state that the falling price of oil and lack of financing has caused them to file. All of the subsidiaries of Flying J remain open for business. I have a hard time figuring out what happened from the time the price was less than 30 dollars a barrel to the time it went to 140 dollars a barrel to now it is 40 dollars a barrel. What did they do with all the money they were making at those sky high prices?

Our friends in the Middle East (OPEC & UAE) who take 700 million of our dollars each year, aren’t happy with the falling price of oil either. Well that’s just too bad!! America needs to continue to look for alternative forms of energy, build more fuel effecient cars, and drill for more oil here so that our buddies over in the middle east will have to find another way to pay for the opulant cities that they are building with our money.

Everything goes in cycles, so I’m afraid that the price of oil might return to higher prices down the road. If OPEC turns off the spicket, it could happen sooner than later. Perhaps the prices will stay low through the coming year so we can all go camping and do so a little cheaper. Visit This Old Campiste for information on camping and let me hear your comments on where the price of oil is going.

Gas sign earlier this year.
Gas sign

Gas sign just a few days ago.
Gas sign

Camping World

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