Gasoline prices could keep falling (1 Viewer)

[Gill]

Gasoline prices are falling fast and could keep dropping for months.

"The only place they have to go is down," says Fred Rozell, gasoline analyst at the Oil Price Information Service (OPIS). "We'll be closer to $2 than $3 come Thanksgiving."

Travel organization AAA foresees prices 10 cents a gallon lower by the end of next week. It reported a nationwide average of $2.84 Tuesday, the lowest since April 20.

It's good news for consumers and the economy. Continued lower prices "may act like a tax cut" and stimulate spending, says Richard DeKaser, chief economist at National City in Cleveland. He calculates that higher energy prices the first six months cut growth of consumer spending 1 percentage point.

http://www.usatoday.com/money/industries/energy/2006-08-29-gas-price-usat_x.htm

This is good news for consumers.... and bad news for Democrats. I'm sure they were planning on using high gas prices as a campaign issue this fall.

Gas prices are dropping fast around here. Just a few weeks ago, it was over $2.90/gallon. When I filled up Sunday, I paid $2.47/gallon. That means a tank of gas is about $9.00 cheaper now than just a few weeks ago.

 

[RightinNYC]

Its to be expected. Glad to hear oil is coming down off its overpriced highs.

 

[Gill]

Its to be expected. Glad to hear oil is coming down off its overpriced highs.

I was surprised to read in the article that the wholesale price of gas is $1.77 to $1.79 per gallon. I wonder if that's the price to the suppliers or the price to stations. I've always heard that the stations only make a few pennies per gallon from gas.

 

[aps]

I am disappointed that gasoline prices are going down because people are addicted to oil and NO ONE is doing anything about it. Make gas expensive so that people THINK before they get into their cars and pollute the air. Also, anyone who owns an SUV should be paying out the nose to use that eco-rapist car. I have been loving the idea that SUV owners are paying out the nose to fill up their wasteful cars. LOL I fill my cars up maybe about once every 6 weeks, so the increase in gas hasn't had much, if any, of an impact on moi. My feeling about gas prices has nothing to do with the fact that I am a democrat--it's all about air quality. Bush said yesterday that we were addicted to oil. Oh really? Then why don't you do something about it, dumba$$?

 

[RightinNYC]

I am disappointed that gasoline prices are going down because people are addicted to oil and NO ONE is doing anything about it. Make gas expensive so that people THINK before they get into their cars and pollute the air. Also, anyone who owns an SUV should be paying out the nose to use that eco-rapist car. I have been loving the idea that SUV owners are paying out the nose to fill up their wasteful cars. LOL I fill my cars up maybe about once every 6 weeks, so the increase in gas hasn't had much, if any, of an impact on moi. My feeling about gas prices has nothing to do with the fact that I am a democrat--it's all about air quality. Bush said yesterday that we were addicted to oil. Oh really? Then why don't you do something about it, dumba$$?

Does your excitement for higher gas prices extend to the increased prices that you pay on literally everything you buy as a result of the increased costs of transport?

 

[aps]

Does your excitement for higher gas prices extend to the increased prices that you pay on literally everything you buy as a result of the increased costs of transport?

Sure. I don't mind paying more $$ if it helps reduce auto emissions to even a small extent.

From Thomas Friedman:

That's really touching. First G.M. offers a gasoline subsidy so more Americans can get hooked on nine-mile-per-gallon Hummers, and then it offers a discount to the soldiers who have to protect the oil lines to keep G.M.'s gas guzzlers guzzling. Here's a rule of thumb: The more Hummers we have on the road in America, the more military Humvees we will need in the Middle East.

You want to do something patriotic, G.M., Ford and Daimler-Chrysler? Why don't you stop using your diminishing pools of cash to buy votes so Congress will never impose improved mileage standards? That kind of strategy is why Toyota today is worth $198.9 billion and G.M. $15.8 billion. G.M. is worth just slightly more than Harley-Davidson, the motorcycle company ($13.6 billion).

President Bush remarked the other day how agonizingly tough it is for a president to send young Americans to war. Yet, he's ready to do that, but he's not ready to look Detroit or Congress in the eye and demand that we put in place the fuel-efficiency legislation that will weaken the forces of theocracy and autocracy that are killing our soldiers in Iraq and Afghanistan -- because it might cost Republicans votes or campaign contributions.

This whole thing is a travesty. We can't keep asking young Americans to make the ultimate sacrifice in Iraq and Afghanistan if we as a society are not ready to make even the most minimal sacrifice to help them.

http://select.nytimes.com/search/restricted/article?res=F10714F6345A0C728FDDAC0894DE404482

 

[aps]

Ah, more wisdom from Thomas Friedman:

[W]e need a tax on gasoline at the pump that will keep prices around $4 a gallon (still roughly $1 less than most Europeans pay), or we need a tax on vehicles that will make gas guzzlers prohibitively costly and hybrids and smaller cars enormously attractive. The sooner and the more we take the price of gasoline up -- and keep it there -- the sooner we can bring it down forever. If we want to make wind, solar and biomass more competitive, gasoline has to cost more, not less.

The president can start by pushing the bipartisan Fuel Choices for American Security Act, now wending its way through Congress. This bill would mandate that every car sold in America would not just have seat belts, but would also be flex-fuel capable so it could run on ethanol, methanol or gasoline. It would also pave the way for the rapid commercialization of plug-in hybrid vehicles, which would combine electricity and gasoline to get 100 miles out of every gallon of gasoline consumed.

http://select.nytimes.com/search/restricted/article?res=FB0913F7385B0C7B8EDDAD0894DE404482

 

[Kandahar]

Does your excitement for higher gas prices extend to the increased prices that you pay on literally everything you buy as a result of the increased costs of transport?

For ME it does. Bring on the $2 per gallon gasoline tax, please. Long-term national security requires sacrifices, which may include short-term inflation.

As long as gasoline is cheap to American consumers, Americans will continue to give aid and comfort to our enemies. It doesn't take a genius to notice the correlation between the rise in Iranian/Russian/Venezuelan belligerence, and the rise in their oil profits. Let's tax the **** out of it to reduce consumer demand.

 

[RightinNYC]

Sure. I don't mind paying more $$ if it helps reduce auto emissions to even a small extent.

From Thomas Friedman:

Rather than institute a gas tax or any other drastically inflationary measure, why not just mandate that vehicle manufacturers increase their fuel efficiency?

Same result, no inflation.

 

[RightinNYC]

For ME it does. Bring on the $2 per gallon gasoline tax, please. Long-term national security requires sacrifices, which may include short-term inflation.

As long as gasoline is cheap, Americans will continue to give aid and comfort to our enemies.

Again, rather than raise the price of gasoline, why not just curb demand through the production and implementation of more efficient vehicles?

 

[aps]

Rather than institute a gas tax or any other drastically inflationary measure, why not just mandate that vehicle manufacturers increase their fuel efficiency?

Same result, no inflation.

LOL did you see that second article I posted that essentially said the same thing? I would love it if Congress passed such a mandate. Can you help them do that?

 

[Kandahar]

Again, rather than raise the price of gasoline, why not just curb demand through the production and implementation of more efficient vehicles?

American/Japanese manufacturers are doing that, but it's going too slow. The free market is great, but it doesn't deal with threats to national security.

Automobile companies will develop fuel-efficient vehicles in time...but the speed at which they'll develop them is correlated to how much demand they think there will be.

A steep gasoline tax will drastically increase the demand for fuel-efficient vehicles, thereby creating an economic climate where they are produced much faster.

 

[Gill]

A steep gasoline tax will drastically increase the demand for fuel-efficient vehicles, thereby creating an economic climate where they are produced much faster.

It would also raise the price of everything we buy, including groceries. Almost everything we use in today's world is made from petroleum byproducts.

A $2.00 tax would send the American economy into a tailspin.

 

[Kandahar]

It would also raise the price of everything we buy, including groceries. Almost everything we use in today's world is made from petroleum byproducts.

You're right, it would. National security requires sacrifice. But if you're really worried about it, those price increases could be offset by reducing corporate taxes.

A $2.00 tax would send the American economy into a tailspin.

No it wouldn't, that's a big exaggeration. Sure, it would increase inflation for a couple years and might slow the economy down, but it wouldn't send it into a tailspin. I remind you that gasoline prices have approximately doubled in the last two years, and the US economy has basically shrugged it off.

 

[Gill]

You're right, it would. National security requires sacrifice. But if you're really worried about it, those price increases could be offset by reducing corporate taxes.



No it wouldn't, that's a big exaggeration. Sure, it would increase inflation for a couple years and might slow the economy down, but it wouldn't send it into a tailspin. I remind you that gasoline prices have approximately doubled in the last two years, and the US economy has basically shrugged it off.

What about the poor people that barely get by now? Are you telling them tough luck, you don't need a car and to bad, a 20% increase in the cost of goods and services is needed so just sacrifice something... like your medicine. Or more likely, do you suggest we just increase wellfare to cover the increased cost?

And how much stronger and more robust would the economy be if gas hadn't doubled? Increase gas to $5 a gallon and see what happens to the economy.

 

[Kandahar]

What about the poor people that barely get by now? Are you telling them tough luck, you don't need a car and to bad, a 20% increase in the cost of goods and services is needed so just sacrifice something... like your medicine.

I'm more concerned about the poor people that barely get by now...being buried under the rubble of an Iranian nuke bought with oil money.

But like I said, if those price increases turn out to be a serious problem, those things can be offset by reducing corporate taxes to lower prices, or by reducing income taxes to give people more spending money.

Or more likely, do you suggest we just increase wellfare to cover the increased cost?

Why is that more likely?

And how much stronger and more robust would the economy be if gas hadn't doubled? Increase gas to $5 a gallon and see what happens to the economy.

I'd rate the present economy as "average." Would you agree? So if you think that a comparable increase in gas prices will send an average economy into a tailspin, logically you must think that had it not been for the last such increase, our "average" economy would be booming like it's never boomed before.

I find that a little hard to believe. It might be a little better, but not much. The American economy can absorb quite a few punches.

 

[Gill]

I'm more concerned about the poor people that barely get by now...being buried under the rubble of an Iranian nuke bought with oil money.

But like I said, if those price increases turn out to be a serious problem, those things can be offset by reducing corporate taxes to lower prices, or by reducing income taxes to give people more spending money.

Just what we need, more corporate subsidies.

Why is that more likely?

That's the typical liberal answer to everything.

I'd rate the present economy as "average." Would you agree? So if you think that a comparable increase in gas prices will send an average economy into a tailspin, logically you must think that had it not been for the last such increase, our "average" economy would be booming like it's never boomed before.

I find that a little hard to believe. It might be a little better, but not much. The American economy can absorb quite a few punches.

I certainly think it would be well above average were it not for high gas prices.

 

[oldreliable67]

It isn't the nominal price of gasoline as much as it is its availability: as long as gasoline is available, we'll pay the price, whatever it is. Yes, we'll try to conserve at higher prices, but overall, the demand is pretty darned inelastic. The economy will largely unaffected in the aggregate -- sure, some "local" and micro inconveniences and lifestyle disruptions as occur with any large scale transfer of wealth, but in the aggregate, as long as its available, not too bad.

But if gasoline becomes scarce, rationed or unavailable at any price, thats quite a different thing. Now the economy is definitely imperiled. For a hint, read up on the oil embargos of the '70s.

In many respects, gasoline is like credit. If you examine (I'm old enough to remember them, but I suspect most DP'ers will have to research this!) previous credit-related business cycles, you will find that when the Fed took away the punchbowl, and interest rates moved higher, the hangover was modest until the demand for credit far exceeded the supply, and when credit became restricted at almost any price (interest rate), the economy slowed quickly and sharply.

Bottom line: for an essential commodity with a relatively inelastic demand curve, price is less important than availability.

 

[Goobieman]

American/Japanese manufacturers are doing that, but it's going too slow. The free market is great, but it doesn't deal with threats to national security.

Automobile companies will develop fuel-efficient vehicles in time...but the speed at which they'll develop them is correlated to how much demand they think there will be.

A steep gasoline tax will drastically increase the demand for fuel-efficient vehicles, thereby creating an economic climate where they are produced much faster.

If you;re going to use taxation to force people to comserve gas, I have a better idea.

Each vehicle has a EPA estimated city/highway mileage.

For every 1 MPG the EPA estimate is under CAFE stadards, apply a 5% tax.
For every 1 MPG the EPA estimaue is over CAFE standard, apply a 5% credit

Example:
CAFE = 27MPG
Car 1:
$32,000, 18 MPG
Tax assessment: $14400

Car 2
$14000, 32 MPG
Tax credit: $3500

The tax from Car 1 will fund the credits for 4 Car 2s.

This incents people to buy cars with good mileage, but still allows people a choice. Note that this will also help low-income families afford a new car.

 

[RightinNYC]

LOL did you see that second article I posted that essentially said the same thing? I would love it if Congress passed such a mandate. Can you help them do that?

Did my damndest. :2razz:

 

[RightinNYC]

American/Japanese manufacturers are doing that, but it's going too slow. The free market is great, but it doesn't deal with threats to national security.

Automobile companies will develop fuel-efficient vehicles in time...but the speed at which they'll develop them is correlated to how much demand they think there will be.

A steep gasoline tax will drastically increase the demand for fuel-efficient vehicles, thereby creating an economic climate where they are produced much faster.

Or we could just skip the tax and mandate it.

 

[Stace]

Or we could just skip the tax and mandate it.

Did you happen to notice that the last action taken on that bill was almost exactly a year ago?

 

[Trajan Octavian Titus]

For ME it does. Bring on the $2 per gallon gasoline tax, please. Long-term national security requires sacrifices, which may include short-term inflation.

As long as gasoline is cheap to American consumers, Americans will continue to give aid and comfort to our enemies. It doesn't take a genius to notice the correlation between the rise in Iranian/Russian/Venezuelan belligerence, and the rise in their oil profits. Let's tax the **** out of it to reduce consumer demand.

OMFG ya cuz that didn't nearly destroy our entire economy during the Carter administration. :roll:

 

[BWG]

But if gasoline becomes scarce, rationed or unavailable at any price, thats quite a different thing. Now the economy is definitely imperiled. For a hint, read up on the oil embargos of the '70s.

You mean like this?

Just think where we would be IF only we had implemented some of our ideas or actually done something back in '73, like we talked about. But it's like right now, we talked and gave lip service until OPEC lifted the embargo, then everything was fine again. Plenty of gas. Embargo? That was so yesterday. Odd and even days, 10 gallons at a time, after waiting in line for hours, hoping they wouldn't run before you got to the pumps. Gas was plentiful again. 'Oil dependency' was just another slongan in the past.

33 years later we haven't made much progress. Will people be writing the same thing 33 years from now? If only we had done something back in 2006.

 

[RightinNYC]

Did you happen to notice that the last action taken on that bill was almost exactly a year ago?

That's actually quite common, many, many bills go that way. A year ago was when it was referred to the subcommittee, but that doesn't mean that was the last time action was taken on the bill. Each week or so, new cosponsors have signed on and negotiations have been made to move it forward. Hopefully it will get a vote before the end of this session, but it might get pushed off until next spring.