Pumping Out Your Pocket

Gas is considered one of the highest on the lists of things you need to get through every day. Wether you drive or not, the fact that the gas prices are rising has had an impact on the way you live. The impact may be blatenly obvious, for example the increased price at the pump; or the impact may be more subtle, such as increased food prices. Either way we are all feeling the economic squeeze that is presented when you have to fill up. So what is the deal with the rising gas prices?

Honestly with the crude oil price running around $64 a barrel you can expect the price to be a bit more. However if you take April for example, the price of the crude oil is $7 less per barrel this year than last you, but the cost at the pump is 50 cents higher. Here is where the educated consumer comes in. It doesn't take much to see that if the crude oil prices are down, so should the gas price. Where is the extra 50 cents per barrel going? And why are the gas prices still rising?

Oil companies are the ones to look at in my opinion. Profit margins for the oil companies in the 2005 and 2006 years were record highs. The oil companies state that this is because a record ammount of gas is being sold, but consistantly their profit margin has listed higher than other industries profit margins. And they think that is quite alright because they are on the beneficial end of it. The oil companies are strongly against protections that might help the consumer such as taxes and injunctions that set the prices in 1973-74 and 1980 when the government wanted to protect the consumers from the problems caused by the disruptions elsewhere. Their stance is that though it did help the comsumer money wise, it harmed the consumer because consumers did not look elsewhere to find ways to conserve energy.

So where does that leave your average consumer? By the end of this summer we all will be seeking ways to slow the blow to our wallets. Some analysts are suggesting that Diesel fueled cars will become more popular as they have in Europe. The diesel engines developed in Europe have started to provide higher gas milage and better emissions that comparable traditional fueld cars. We are also beginning to see the rise of the so called "Green" cars that run on vegtable based oils. While this sounds like a great solution, progress has been sluggish as fueling stations are rare. The industry might pick up as it is gaining advocates such as Kettle Foods who opened a fueling station based on it's recycled vegtable oil from it's chip production plant in Oregon. If this trend takes off we my be looking at a very lucrative industry for the food markets, and an ousting of the current oil producers. The last trend that is offering a solution are Hybrid and Electric cars. While Hybrid cars seem like a good choice, expensive repairs and higher insurance are making up for the tax bonuses you get for buying one. The technology is starting to take off but it will be a while before it becomes cost effective enough for most consumers. Electric cars are becoming more viable as a solution as well, but again the cost is prohibitive.

In the end, we all end up at the gas pump anyway, feeling the pinch. Only through the movement of consumers to better options will the oil companies finally realise that we will not put up with what they are handing us. If more people make the move to green cars or Hybrids, the industries will pick up the demand and the cost will go down as the convience increases. I think if consumers work hard to make their opinions known we will cease turning into Chevron for gas and a soda, and instead turn into Mc Donalds for a big mac and a fill up.