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Unresolved Issue: The Shocking Price of Gas

(OPEC which is responsible for about 40% of all global oil production has no plans in 2011 to increase production and as the demand for oil continues to rise globally the price of gasoline will continue to rise even higher.

 
PRLog - Dec. 28, 2010 - DEARBORN HEIGHTS, Mich. -- As you leave for work this morning you are most likely aware that the number one issue not being discussed anywhere these days is the price of a gallon of gasoline.  From where I sit in southeast Michigan gas was averaging just over $3 a gallon at $3.06 for the economy brand and up to $3.29 for the premium brand.  With the price of oil down slightly yesterday you may feel like there is reason to be optimistic that gas prices may follow suit, but think again.  No one in the forecasting business feels a sense of relief coming as the price of gasoline continues to rise and there seems to be no end in sight in the foreseeable future.

The Organization of Petroleum Exporting Countries (OPEC) which is responsible for about 40% of all global oil production is not saying much these day except that they have no plans in 2011 to increase production and as the demand for oil continues to rise globally and the production of oil continues to be stagnant the simple supply and demand theory tells the only story we need to know as consumers:  gas prices will continue to rise in 2011.

It’s been a long time since we have seen gas prices take a kindly view of our pocketbooks.  Buying gasoline is a necessary evil, as we all know.  There is really no competition on price and as consumers the only break we may get is a reward card that allows 10 cents off a gallon or some other kind of reward system that allows us to get cash off a cup of coffee for filling up at a particular place, but that is not a real savings.  A few years back gas station owners made the decision to pass along the hard cost of using credit cards by penalizing you for using a card charging up to 10 cents a gallon more for a gallon of gasoline if you used you debit or credit card instead of cash.

Clearly the cost of gas impacts other areas of our lives as that increase has to come at a cost to our personal budgets.  Paying $60 or more to fill up your tank and maybe having to do that twice a week will affect your grocery budget, or your entertainment budget, or dining out budget.  Everyone is effected by the increase in gasoline prices and with projections on production as we already mentioned not seeing an increase and consumption a given, where and what can be done to bring down the cost of gasoline?

That is an age old question.  The President can certainly appeal to OPEC to increase production therefore bringing down the cost of gasoline, but OPEC has never been particularly moved by the requests for production increases.  All the political maneuvering won’t make much of a difference and as we aren’t producing enough domestic oil, and you can save the environmental arguments for now, what you see is basically what you get.

You are being held hostage by OPEC, but you have always been held hostage by OPEC.  In my home we are trying to be strategic with our gas usage but with my wife working daily, and all three of my children working either full or part time the strategy is failing out of necessity of need not lack of discipline.  I am sure that we are not alone.

We are doing a better job at making sure trips are planned in advance.  We are attempting to make sure that with my youngest son especially that he rotates with his friends on who drives and how often they share a ride.  It may seem petty but it is necessary in order to save a few bucks where we can.

The cost of moving vehicles impacts more than just our personal cars.  The cost of moving products across the country impacts the cost of food and fuel.  It impacts the cost of clothing and curlers and as gas prices continue to skyrocket the impact to the economy will further slow down an already painfully slow recovery.  

What can be done?  What will be done?   How high will prices go?  Those questions don’t have ready answers but a former Chairman of Shell Oil says that we are headed to $5 a gallon for gasoline by the beginning of 2012 which means a gradual increase as we work our way through the upcoming year.  

Maybe we aren’t complaining about the price of gas now and maybe complaining won’t change a thing but something must be done and soon if we want to avoid another serious threat to our families pocketbooks.  If the prognosticators are correct and we are headed for $5 a gallon for gas what will we have to sacrifice just to get to work, that is if you have a job?   How long before a $3 cheeseburger costs $4?  How long before your $5 breakfast costs $6?  It may be sooner than you think because one way or another you will pay the increase in gas prices for business and industry whether you realize it or not.

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Tony Trupiano is a former national syndicated progressive radio talk show host, author, and a former candidate for Congress. He is also a nationally recognized media trainer. He can be reached at tony@mediatony.com and can read his Blog at http://www.mediatraining.me

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Source:Tony Trupiano
Phone:313-914-3234
City/Town:Dearborn Heights - Michigan - United States
Industry:Consumer, Energy, Government
Tags:opec, gas prices
Shortcut:prlog.org/11180776
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