Wednesday, May 24, 2006

Expensive is relative.

Near the end of this article is the following:

"Most Americans, about seventy percent, according to the survey, do not think $3.00 a gallon is 'too expensive' for gasoline. In other words, $3.00 a gallon for gasoline would not cause them to take serious measures to curtail their usage. About half think $4.00 a gallon would be 'too expensive.' "

If most Americans had been asked about $3/gal gas 3 years ago they would have been defiantly opposed. When prices creep upwards on things people buy regularly those people do not take as much notice until their credit card bill is notably more out of control than it was. If gas prices were to increase by a penny every two weeks or so and would hit $4/gallon in about four years, then people would say $4 was not "too expensive." If it were to be $4 tomorrow then a year or so later they would probably say that $4 is not "too expensive." Expensive is relative. The problem is where the money goes.

The cost of gas, right now, is market driven. That is to say that consumers have set the cost at $3/gal through supply and demand. Around $2 of that is profit (going back several steps to oil companies, not to the gas station) if the government were to impose a $1.50/gallon tax then the price would correct for this after a short while and remain at ~$3/gallon...only the oil companies would lose money. The government could take the money from such a tax and use it to fund renewable energy or to build up/improve public transportation. At the least they could put money into road work to relieve congestion (which would improve fuel efficiency).

Even if gas prices would go up some, if the alternative is faster global warming, can we really afford not to do these things. Really, expensive is relative.


Anonymous said...

Super color scheme, I like it! Keep up the good work. Thanks for sharing this wonderful site with us.

Anonymous said...

I find some information here.