As most of you have probably seen, gas prices are on the up and up. Here in Arizona, we are paying $3.41. That relatively cheap for a western state considering that one state west of us is paying over $4 in some parts. A recent poll done by CNN showed that 94% of Americans think that we'll be paying over $4 a gallon this spring and 78% think we will be paying over $5 some time this year.
On a strange note to this, demand for gas has actually gone down. How is this? People have the uncanny ability to adapt. More people are commuting to work together or using their city's mass transit system. SUV sales are also dropping like a rock. With more fuel efficient vehicles on the market, people are buying them. Toyota's Prius sales increased by 67% this April.
Now the price of oil has broken many barriers. It has made a new record by breaking the $120 wall and forecasters say that the price will most likely just keep increasing. The only way experts think it will go down is by depreciating the value of oil. Will it happen? Who knows.On a strange note to this, demand for gas has actually gone down. How is this? People have the uncanny ability to adapt. More people are commuting to work together or using their city's mass transit system. SUV sales are also dropping like a rock. With more fuel efficient vehicles on the market, people are buying them. Toyota's Prius sales increased by 67% this April.
It's nice to know that 83% of Americans think oil companies are making too much profit.
2 comments:
It's interesting that 83% of Americans think oil companies are making too much profit, for several reasons. Although profits are high, they're not as high as they could be, and there are other factors than some might think.
First of all, many oil companies have had to scale back production, since they would have to raise prices faster than the market could handle, had production continued at the same rate. If companies continued buying crude at the same rate they had been, the price for the finished product would have risen much faster and much higher, in order for those refineries to break even.
Secondly, even buying E85 fuels (which is a step toward alternative fuels) puts money in the pocket of oil companies. As we all know, though, the increased demand for corn to produce that ethanol has also caused higher prices in food. Furthermore, producing ethanol has an incredibly high cost of energy, making the concept highly inefficient.
Sure, the jump in Prius purchases is good, and it's a shame American automakers don't have a comparable hybrid on the market. While it's a good bet most (if not all) of those Priuses are built in the US, by American workers, but I won't be surprised if it turns out that the fact that American companies can't yet really compete in the hybrid sector ends up causing them to lose even more money, adding to the economic woes.
Hopefully those who lose their jobs at GM or Ford find work at Toyota.
Yeah, Toyota has a plant in Kentucky where most of their cars sold in the US are made.
However, I personally would rather run my car on my own blood than pay $4.00 a gallon for gas. Or, I would pay a hippie to show me how to convert a car to run on battery or ethanol.
However, Exxon Mobil and the other big petrol companies have a sort of monopoly effect, which is bad for the market. Additionally, they are using their monopoly power to manipulate a product with a currently inelastic demand. Which basically makes oil companies and their lobbies grade one a-holes.
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