Drivers To Feel Pinch Of Gasoline Prices

[Chuck]

When will consumers cut elsewhere to pay for gas?...Crude oil prices account for about 68% of the cost of gasoline, and prices typically rise in the spring, as seasonal demand and the cost of making summer-grade fuel both increase.

Cattle Network - Jan. 10, 2008

NEW YORK (Dow Jones)--On the heels of $100-a-barrel crude oil, brace yourself for record-high gasoline prices whenthe peak season approaches, bringing with it a demand increase estimated at half a million barrels a day.

Some analysts fear that a fresh jump in pump prices could help dump the economy into a recession. Current prices of $3.109 a gallon nationwide for regular gasoline - the most ever in January - will zoom to $3.194 in March, according to U.S. government forecasts.

That will top the record high for any month of $3.146 a gallon set last May. By the Memorial Day kick-off of the driving season, prices are predicted to surge to $3.454 a gallon, an all-time record level even when adjusted for inflation. The culprit is lingering high crude-oil prices, said Tancred Lidderdale, an analyst at the federal Energy Information Administration.

Although crude oil prices have been on the march for months, they stormed past the $80 mark in mid-September, when gasoline was heading into a post-summer seasonal downturn, with demand dropping around 400,000 barrels a day, or about 4.3% from the summer peak, limiting price increases… [Read More]

[Blake]

We had a rookie come to work at our station the other day and he said his wife was bringing by a new car they were looking at getting to replace her mustang. I was very intrested in see what they got and I was dumbfounded when she pulled into the parking lot with an envoy.

I asked him if he realized that gas was going to be at a minimum of $3.50 this summer and he said yeah. He said the truck was "only" going to be driven ~15,000 miles a year and its not like it would be that bad. I did the math really quick for him..

15 mpg's in the envoy = $3500 fuel costs @ $3.50 a gallon
40 mpg's in a civic = $1312.50 @ $3.50 a gallon


Guess they like throwing over $2000 a year away

[vtec-e]

Some people still don't get it. I wonder how high gas prices would have to go before he would change his choice of vehicle?

[Earthling]

Gasoline prices are expected to average a summer-season record $3.295 a gallon, up 12.3% from the April-September 2007 driving season.

We've had $3.40/gallon here already.

Harry

[Blake]

Not to mention the civic costs half what that envoy did.

[Euroford]

Don't forget about Honda's legendary build quality and resale value..

[Chuck]

Originally Posted by ethride

Don't forget about Honda's legendary build quality and resale value..

For me, got 139,300 miles on my 5-speed 2000 Insight, first 2-3 years driven aggressively - only major problem the traction battery (half caused from software that is fixed on a Honda recall, half from my early driving again).

[Himmitch]

Makes me think of my sister in law that just got a new Pontiac Torrent. It is only her and her child that she only has 1/2 the time. I told her the cost of that was around the same cost as a hybrid. Needless to say She pick it up any way. She then told me that it was just about empty and it only took $20 dollars to fill it to a half tank! I told her that she needs to think of how far the car moves on $20 not how far the needle moves for $20.

People just don't get it.

[koreberg]

@himmitch

Thats funny.

I don't think people will get it until it gets much higher.

[Robert Lastick]

Lots and lots of "smoke and mirrors" here, so much in fact that I will, in the interest of time, pick the 3 juiciest.

I want you to believe this # 1.

David Wyss, senior economist at ratings agency Standard & Poor's said; "Consumers have been "faring better than expected," in the face of high gasoline prices. Because gasoline prices tend to ebb and flow according to seasonal demand, drivers tend to ride out the peaks, he said.

Yes, Dave we are "consumers", and we are "drivers" and many other things. But, ultimately, we are all Americans trying to deal with a cost of living increase America has never before seen, primarily due to the cost of the price of gasoline. The fact that we may or may not have bought a little more or less does not change the fact that gasoline prices do not go up and down. They are going up, fast. That fact is reeking havoc with Americans budget and with America.

I want you to believe this # 2.

Mr. Wyss goes on to say;

"Crude oil prices are set in the world market." He expects crude oil prices to come down to $75 a barrel by mid-year, but he's "not betting a lot on it." Fundamentally, the crude oil price is too high and not sustainable.

Oh, I get it. The "world" market, thru sophisticated analysis, determines that companies making gasoline will have to pay , say $90.00 a barrel at some time in the future and that is how the cost we pay for gasoline is determined? No, that can't be.

1. BP doesn't pay $90.00 a barrel for oil they pump in Alaska. Their cost is the cost for them to mine it and get it to their refineries. Simply put, it does not cost large oil companies what the going market rate is to get oil.

2. They also get other valuable things out of that hole in the ground (like natural gas).
3. Oil miners and gasoline refiners most often are the same company.
4. The $90.00 cost is probably only the cost we might have to pay in the future for oil we buy from others.

And so, now we see where all these "windfall profits" are coming from. These oil companies are getting much of their oil for FAR LESS than what the traders who are reacting to fears and speculation only, think they will pay others for oil in the future.

I want you to believe this # 3

"Politicians may talk about high energy prices between now and Election Day (Nov. 4), but it will be 2009 before any new policy is set and possibly much longer before it would actually take hold," he said. "The oil market has been left largely to its own devices so far, and I would expect that to remain the case."

This one is by far the hardest for me to approach, for these "politicians" we elected. We all know why the oil market has been left by the politicians "to their own devices". We all also know why politicians, the media and David Bird have little, if anything to say about;

Price Collusion.
Price Fixing.
Violations of anti-trust regulations.
Restraint of free trade.
Congressmen & Special interest groups
Congressmen & lobbying.

You are right, Tim I also expect little to be done. Way too much money is being made by keeping us on our "Silverado habit".