A big bump at the pump

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Wrote yesterday that gas will be going up. People are now predicting $4/gallon prices and that this will have a dampening effect on the recovery. From Chicago station CBS2:
Gas Prices Are Up, But Is That A Good Thing?
Don't look now, but a gradual rise in gasoline prices has suddenly turned into a gallop, with drivers facing a new round of sticker shock.

But as CBS 2's Derrick Blakley reports, the higher prices might actually be a good thing.

The growing pain at the pump kind of snuck up on many Chicago drivers, but now they're really feeling the bite.

"I just paid $3.54 for gas," said Michelle as she filled up at a Chicago gas station. "It's just outrageous."

Just a month ago, according to AAA Chicago, unleaded regular averaged $2.86 a gallon in the Chicago area.

Last week, it was $3.02.
And the economy:
"The last thing we want to see is higher energy prices at this time," said Flynn, because it can impact the rest of the economy negatively.

"I'm not happy with it," grumbled motorist Don Davis as he filled up. "I think it's gonna kill our recovery."

Davis fears a repeat of July 2008, when oil prices hit a record.

"It was $140 a barrel for oil and gas was $4 a gallon. I feel it's happening again. And it's not good news for the average person, that's for sure."

Bad news because money that's spent on higher energy costs is money diverted from other parts of the economy.

"Anytime you're spending more money on gas, it's gonna dip into your pockets a little," noted Brad, another driver topping off his tank.

Plenty of analysts believe with unemployment still over 10 percent, the economy's just too weak to sustain gas prices of $4 a gallon.
Pain at the pump but compared to England, we have it good. From the UK Daily Express:
MISERY FOR MOTORISTS AS PETROL HITS �6 A GALLON

THE �6 gallon arrived at Britain�s petrol pumps yesterday as motorists �continue to be hammered by Labour.

Unleaded hit an average of 119.9p a litre for the first time ever, breaking the previous July 2008 record of 119.7p.

But some forecourts are already charging 131.9p a litre � just a penny short of the �6 gallon.

�This is a dark day for Britain�s hard-pressed motorists,� said the RAC. And there is worse to come, warned experts last night.

A �perfect storm of rising wholesale costs, the weak pound and more Government tax hikes will propel fuel costs even higher. Drivers were warned to brace themselves for a 5p-a-litre surge in the next three months, pushing unleaded prices to a 125p a litre average by the summer holidays.
The GBPound is trading around $1.54USD so this is $9.23USD/Gallon for Gasoline. The sad thing is that if we started drilling now and started building refineries now, we would remain in pain for another five to ten years before the increased supplies kicked in and the prices adjusted downward. As it stands now, we sent a good chunk of our money over to nations that don't really like us all that much and which use the money to foment terrorist organizations (Saudi . Wahhabism) Why are we doing that? Who is getting paid off?

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About this Entry

This page contains a single entry by DaveH published on April 9, 2010 12:48 PM.

F. A. Hayek and the Knowledge Problem was the previous entry in this blog.

$20BN down the rat-hole with f&ck-all to show for it is the next entry in this blog.

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