Gas Prices Reaching The Tipping Point
Unless you’ve been hiding under a rock lately, you’ve most likely noticed that fuel prices at the pump have been steadily increasing. Some folks blame it on the problems in the middle east. Others blame it on “greedy oil companies”. Others site the cause as being related to the simple rule of supply and demand. Countries like China, India and Brazil are growing exponentially and therefore require more energy to fuel their growth. If that’s the case, there’s little we could do here in the US to slow the rate of growth in the price of a barrel of oil. Except maybe produce more of our own oil.
The price of a barrel of crude just topped over $112 a barrel for the first time since 2008. This comes at a time when the national average for a gallon of gasoline hits $3.75 a gallon.
$3.75 seems to be the tipping point according to industry experts when it comes to effecting consumer behavior. They predict that consumers will begin to curb their driving, cutting down on unnecessary trips and driving less miles per week. There is some evidence that we are already beginning to see signs of restraint when it comes to consumer behaviour already. As a reaction to rising gas prices, consumers are gravitating to purchasing smaller cars. Sales of 4 cylinder cars are up 26% for the 1st quarter of 2011. Hybrid sales are up substantially as well.
Economists worry that the rising costs of fuel will stifle the fledgling economic recovery that has only recently begun to show signs of hope.
Lets hope prices don’t go much higher. Otherwise you may need to stock up on fuel in our John Dow Gas Caddy shown below. Anybody remember those odd / even days and gas lines from back in the 1970’s?