Increase In Gas Prices Stirs Up – Complacence?
Spring is almost here and with it brings the almost predictable increase in gas prices and the dire warnings about how high gas prices will go. This time the reason given is the turmoil in Libya but it seems that every serious world event or disaster is accompanied by high gas prices.
There are the fearful warnings from experts about how high gas prices will be by summer – $1.50 a litre; $2 or more – better get used to it! I recall the same analysts saying the same thing 2 years ago.
High Gas Prices Outraging Consumers?
Reporters interview people at the pumps who can’t believe how much they’re paying to fill up. How dare those greedy oil companies gouge us this way when they earn all those billions in profits! But, will they be changing their driving habits or purchasing a more fuel-efficient vehicle, or will they just complain? I live in Alberta where it seems like every 3rd vehicle is a big honkin’ truck or SUV so I guess they can afford it.
Back in the early 80’s the price of oil doubled (to $35 a barrel!) due to war between Iran and Iraq and the Arab oil embargo. At that time everyone drove big boats like Buicks and Oldsmobiles or muscle cars like Cameros and Chargers with their gas guzzling V-8 engines. In the US there were actually riots at the pumps.
Here in Canada, the metric system had just been introduced and since gasoline was now sold in litres instead of gallons, we didn’t know what the heck we were paying. We just saw that the price at the pump was less, but what we were actually paying was considerably more.
This was when Toyota and Honda entered the market with their cute (and at the time, inexpensive) fuel-efficient compact and sub-compact vehicles that got 100km/litre (or whatever the claim was) and people rushed to buy them. The big American car companies had to do major revamps to their product line-up to compete or be left in the dust.
Consumer Complacency
Now we seem to be in the same type of situation – problems in the Middle East and an increase in gas prices. What is the solution this time around? There have been some inroads with the manufacturing of electric and hydrogen vehicles but we are woefully behind in pursuing the new technologies that make our dependence on oil and gas a thing of the past.
Are we just going to complain as we pull out our wallets at the gas station with a sigh and shake of the head? Or will we use those same wallets to urge the further development and improvement of fuel-efficient and cost effective new vehicles instead? Are high gas prices here to stay?
Great perspective Boomer. Oil and gas prices can only go so high in a short period of time. The more parabolic the move up, the harder the correction. Having said that, energy prices are trending higher in general, so it makes sense to get serious about alternative technologies – of course, it made sense 30 years ago too, and maybe we wouldn’t be at the mercy of this commodity boom-bust cycle if we had put more effort into standardizing other technologies back then.
Hi Balance Junkie: I’ve noticed that when there’s a large increase in price the “correction” is always a few cents higher than before so they’ll always be trending higher no matter how the cost of the barrel fluctuates. I know the car manufacturers have made great strides in the fuel efficiency of their new vehicles – especially as compared to 20 -30 years ago but alternatives are definitely slow in coming. I’m not a fan of using food sources such as grain or corn as gas substitutes though.
Recently finished a great read by Jeff Rubin – Why Your World Is About To Get A Whole Lot Smaller. I think the solution in bigger cities like Kitchener-Waterloo-Cambridge is light rail transit. The price of gas will force many sooner or later to abandon their autos but I think more would switch if the option was better.
Hi Jeff. I agree, transit should be used more consistently. Where I live, however, all routes lead to downtown which is fine if you work there. If I want to go elsewhere it takes 2 – 3 buses (trains) to get there and up to 1.5 hours travelling time when I can drive to my destination in under 30 minutes. Better planning and more economical fares should increase usage.
If I was in charge of the universe, there’d be a special place in hell reserved for those who get mad at the gas station guy about the price of gas.
Hi Financial Uproar: Do you own a gas station? I think the people who get mad are the same road ragers you run across wherever you go – it’s all about them, so get out of the way!
We will be leaving South Carolina for Ontario pulling our 5th wheel in about 4 weeks Thought I would give everyone a heads up to buy energy stocks; gosh knows how much fuel we will use. Thought a little humor was in order.
Hi Gary: I have noticed that my energy stocks have gone up quite a bit lately and if they increase their dividends I might be able to afford to travel a bit too. I hope all the snow is gone by the time you get to Canada. Have a safe trip!
We just hit $2.16 a litre in NZ.
We only have one car, thank goodness, but no doubt PT prices will soon increase too.
Hi eemusings: I think we would have collective heart attacks if our gas prices went that high (almost double our current prices) in Canada. We’re actually still pretty inexpensive compared to a lot of countries.
I’m sure that, once again, the higher gas prices will stimulate an increase in sales of smaller and hybrid autos. Bill
Hi Bill: I’m sure you’re right. The difference this time around though is that many of the small fuel-efficient and hybrid vehicles are out of price range for a lot of people.
You make a good point regarding the increase in price of hybrid vehicles. Also the Toyota Prius has better than a 50% market share among hybrids. No doubt that car will be in short supply given the on-going tragedy in Japan. Bill
i hate how high gas prices are! It makes it nice that I work from home and don’t have to commute, but I still worry about my husband who lives 30 miles from work (he does carpool though) and my stepkids and family live far away!
Hey Jessica. Our gas prices just went up another 7 cents yesterday. In this instance you’re lucky to be working from home. It makes sense now to car pool and really plan out our trips so we’re not driving unnecessarily.
In the short term, we can drive less. In the longer term, we can drive a smaller car or a hybrid. Bill