Strap Yourselves In!

I just got back from gassing my two vehicles, a 1993 Chevy S-10 and a 1998 Toyota Camary. $23 to fill the car (and that was a half tank) and $40 for my truck. $63!! And the summer driving season hasn't hit yet.

Gas at the beginning of the month averaged $2.24/gal in the greater New Haven area. It is now closer to $2.56, close to a 14.5% increase. Should we extrapolate that 14.5% out until September? That month over month increase would have us over $5/gal! Now I don't think (at least I'm praying) it won't keep that pace through the whole summer but we will be looking at over $3/gal. Looks like summer vacations will be spent closer to home.

Driving around Meriden I noticed the gas was averaging around that $2.60/gal mark. What has caused this spike?

1. CONSUMPTION - The first claim is that consumption is up, not just here but around the world. Leading this upsurge is India and China.
2. MAINTENANCE - Maintenance on the refineries here. Many of these refineries will be going down at the same time and will reduce the output.
3. GAS TYPES - The types of gasoline that need to be produced. With the limited number of refineries and the laws passed that certain areas need certain types of gas, we create our own shortages that drive supply down and prices up. Any problems with these refineries or issues getting the gas there will create an immediate spike in prices.
4. TRANSPORTATION - There is also the distance the gas needs to travel. 2-3 weeks would not be uncommon to transport gasoline.
5. Instability in the Middle East. Millions of barrels of oil was supposed to be flowing from Iraq. Have we seen this yet? Not to my knowledge. We now have Iran talking about nuclear weapons. Any hint of armament and we see the immediate rise in the price of oil.
6. Our own addiction. Today we import more that 20 million barrels a day. 20 million!! At the current price of $66.50 we are spending $1.33B/day. That is close to $486B/yr. Now do you understand why the national debt is so high and keeps growing?

Increase oil consumption is blamed on the emerging countries of China and India but they only consume 6.4M and 2.3M barrels a day. To put it in better perspective, the world consumes 80.7M barrels a day. With our 20M barrels, WE CONSUME 25% of the oil! China, the next largest is only 8%.

So how do we help ourselves? We don't. We are now going to increase the fuel-efficiency standards on pickups, SUVs and minivans but doesn't take effect until 2008. The largest SUV's, the ones between 8-10,000 lbs - gas guzzlers, aren't included until 2011.

We have got to demand our government get serious right now to curb our import of oil. Our economy can not take the weight of rising energy costs and remain competitive in the global economy. Enjoy your vacation in your home town this year!