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September 5, 2005

Gas Rant

Even though it appears that, adjusted for inflation, our gas price has hovered around $2/gallon for a long time, the current speculation-related gouging is throwing that metric out the window. Double-dipping between the war in Iraq and Hurricane Katrina's wrath, the gasoline companies have succeeded in getting the market over the psychological price point of $3/gallon. Note how the uncertainty of Desert Storm era (ca. 1989-1991) drove the price over the $1/gallon price point (in the dollars of the day) for good, and the Iraq war did the same for $2. Let's hope the $1/gallon premium we're now paying for gas compared to just a year ago will truly be used in a way that repairs (and hopefully augments) U.S.-based refining capacity, as opposed to being profits raked in by convenience store owners (where gas used to be a loss leader, right?) and big oil. Then perhaps the U.S. petroleum products market will stabilize. Will gas go back down to $2? If the collusion that defines the market continues, probably not.

Posted by Alex Harden on September 5, 2005 6:16 PM |

Comments

Just for comparison:

I live in the UK. I filled up my car a day or two ago: 31.86 litres for £29.60, or 92.9p/l.

I'll do the conversion for you: 8.42 US gallons at $53.47, or $6.35/gallon.

Posted by: Malcolm | September 15, 2005 8:22 AM

Thanks for the comment. I realize that we don't have the highest global gas prices here in the U.S.. I recently read this article and it puts some of this in perspective. Governments heavily influence the price of gas. Here's another article I saw that shows the tax overhead per gallon of gas in each U.S. state. From what I've read about Europe, I'm thinking that the U.K. levies a tax that's over 100% of the market price per unit of gas.

I remember going to Canada over a decade ago and doing the CDN$/L to US$/gal conversion and thinking "wow, they pay a lot for gas!"

Posted by: aharden | September 15, 2005 7:34 PM

I'll also point out that the U.K. actually has a mass transportation system that actually works.

Posted by: PsychoPhil | October 23, 2005 10:36 AM

Another reason for the difference is that the US actually drills for oil. Correct me if I am wrong, but I do no believe the U.K. is an oil producing nation. Right or wrong, those that produce none, pay more for it.

Posted by: Scott | October 25, 2005 3:15 PM

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