Wednesday, March 28, 2012

Higher Gas Prices Have Drivers Over an Oil Barrel

Family vacations are in limbo. Sheepshead Bay fishing fleet earnings go up in smoke as boats burn up pricey fuel. Reluctant drivers don’t fill gas tanks as often as they did six months ago. These days ten bucks worth barely budges the gas gauge indicator.
The opening sentence of a Daily News article read: “Spiraling gas prices are squeezing New Yorkers’ wallets like never before — but the petroleum pain could get even worse.” That was SEVEN years ago!
Seems like déjà vu all over again — and drivers are once again, over a barrel — an oil barrel.
Since the new year began, from California to the New York island, from the red wood forest to the Gulf Stream waters (with apologies to Woody Guthrie), Americans are frustrated by record-high fuel prices that have topped $4 a gallon in some states and could possibly reach $5 by summer.
Compared to Brooklyn, with the highest gasoline tax in the country as 67 cents is tacked on to every gallon, the national average, according to the American Petroleum Institute (API), is about 50 cents.
Though the specific source for current gas price increases can’t be pinpointed, there are a number of usual suspects that possibly contribute to the dilemma; the least likely being the president.
Rising fuel costs have become a hot issue as the presidential campaign moves into second gear. Lately, Republican presidential candidates briefly sidestepped attacks on each other to blame President Obama for rising gas prices. Though the president has little control over the matter, GOP opponents underscore it in another baseless attempt to make him the patsy for whatever ails the nation.
While the GOP slams Obama on gas prices, Bloomberg News reported the president said it would be “justified” to end generous oil company tax breaks and subsidies and redirect those revenues to developing clean-energy fuels.
Obama recently mocked Newt Gingrich’s recent pledge to roll back prices to $2.50 a gallon, if he was elected, noting: “(Republicans) start acting like they've got a magic wand and will give you cheap gas forever if you elect us.”
Regardless, Gingrich failed to suggest a plan to fulfill his promise as badly as his presidential campaign has failed to attract support.
Republicans regularly prod Obama to expand drilling off U.S. shores where geologists repeatedly talk about vast deposits of fossil fuels. But even if such activity were to begin soon, the Department of Energy said it would not change nationwide prices for several years. Others argue that off shore oil from hard-to-reach depths would be costly to extract and that expense would be passed on to consumers.
But Republicans, anxious for a new issue now that the economy seems to be slowly recovering, prefer to ignore proof from government industry or scientific sources.
According to the API, varying fuel costs in the last few years are related to accelerated demand in countries like India and China, as well as developing nations, that consume more oil than ever before. Anyone who’s taken Economics 101 knows the principle of supply and demand tends to dictate market prices.
Another factor that adds to gas price increases includes the mounting concern about potential supply disruptions in Iran and elsewhere. But experts point out that U.S. oil imports from the region have become marginal in the last decade. However, that threat still impacts global markets, which, in turn, affects the domestic price. Actually, oil imports have dropped from 60 to 45 percent of total consumption in the last seven years, while government statistics show that domestic oil production has increased by 13 percent since Obama took office, while.
The most common reason cited for rising fuel costs, in that survey mentioned above, was oil company greed. That became evident when the Wall Street Journal reported this week that Big Oil (ExxonMobil, Shell, BP, Texaco and Chevron) collectively had a tidy first quarter profit surge of 45 percent or $36 billion.
Is it any wonder Americans regard oil companies as the chief villain?
Regardless of the reasons, public frustration is compounded when consumers realize that whenever fuel prices spike, grocery and other consumer prices are sure to follow because of corresponding cost increases of transporting merchandise to local supermarkets.
But, no matter who’s at fault, almost everyone wants the government to do something, even if no one can offer a rational plan of exactly what should or can be done. A recent Gallup poll found 85 percent of adults want the president and Congress to take immediate actions to offset gas price surges.
Isn’t funny how some Americans constantly complain about government interference, but look to it when times are tough?
Thrifty families will likely cut back on vacations to save money and opt for staycations closer to home, hoping the final fuel tab doesn’t devastate their vacation funds.
Tour operators in the city and across the nation will keep hiking rates for bus tours and boat rides to keep up with gas price hikes.
A local gas station owner complained to me that when he recently posted a higher price, a few passing motorists honked, yelled and gave him the finger. He now waits until traffic is scarcer to change prices. By the way, he said he plans to vote for Obama in November.
In fact, with Etch A Sketch coming out of the attic, getting dusted off and put back in the spotlight, thanks to recent presidential politics, gas station operators should erect new signs using the classic toy’s process to make it easier to post ever-changing prices this spring.
New York City cab drivers, whose incomes are greatly affected by gas prices, reportedly now drive faster, even more recklessly than usual, to pick up more passengers during a shift. That’s a stupid excuse that jeopardizes the safety of passengers, pedestrians and the driver. Let’s hope patrolling police cars are vigilant before someone gets hurt.
Remember the good ol’ days – back in 2008 – when the average national price of gas fell to $1.66, which at the time was its lowest point in five years. Earlier that year, prices peaked at an all-time high of $4.11. That ceiling is expected to be broken as summer rolls around.
Before you get your motor running and head out on the highway, looking for adventure, leisure or whatever this spring and summer, check your gas gauge, ‘cause if you intend to fill up, remember that when it comes to oil, the price of gas is born to be high.