Sunday, February 8, 2015

The Price of gasoline

So we've had cheap gasoline, relatively speaking, since the end of summer 2014. Instead of the $3+ per gallon which I believe people had grown used to, I know I had, and by getting used to I mean that people used various strategies to offset the costs associated with more expensive gasoline. My belief is based solely on logic and not with facts that when something costs less than what you've been used to paying for it that you will buy and use more of it than you did when the cost was higher. That extends to any consumable and gasoline is a consumable. So what does this mean that more gasoline is being consumed? It means that more carbon is being put into the environment thereby raising the prospect that we are adding more greenhouse gasses, that it is anti-environmental and ultimately global warming is costing us more economically than any savings due to the energy efficiency efforts that have been made over the years, damaging any good efforts towards slowing global warming. So what is the answer? One possibly is (and I'm sure many will think impossible) raise the price of gasoline so that it is never below $3.00 making the cost when it is cheaper to be offset with an added tax. Develop regulations for the oil markets so that the predictive price of refined gasoline on the market stays far more consistent and doesn't fluctuate from day to day due to the gamblers in the commodities market. Whether that will work is way beyond my knowledge of economics, governmental regulations and market forces but I still believe that when something is too cheap people will buy more of it. And as of this writing we would have to rely on the voluntary efforts of people to not use more gasoline because it costs less. And that in my book is not a win win, but a lose lose.