Sunday, June 08, 2008

Cheap Gas - A Thing of the Past

With gasoline rapidly approaching $5.00 per gallon, it is safe to say that the days of cheap gas are gone for good. We have been unusually fortunate in this country. Truth be told, we still are. When compared to much of the rest of the world, gasoline is still a bargain here. Although cheap gas would appear to be a blessing, the other edge of that sword is anything but. We have been lulled into a false sense of security - the wake-up call is loud and clear.

The Arab oil embargo of 1973 saw the end of the muscle car. The big inch, big horsepower and very fuel inefficient cars of the era disappeared almost overnight. They were replaced with detuned and only slightly more efficient cars and the influx of economy imports. Toyota, Datsun and Honda became household words. Along with their European counterparts, these manufacturers were already used to producing cars that treated gas as a valuable commodity. Eventually, U.S. automakers began to get the message, but demand for gas-hungry vehicles returned as quickly as we became acclimated to the new higher prices.

The second oil crisis in 1979 brought with it gas prices in excess of $1.00 per gallon. It was a price so unheard of that pumps had to be modified to reflect the extra digit. It was also the death knell of the “full-service” gas station. Although that was the last oil-crisis that would brings lines and rationing, it did not, apparently, teach us to get ready for the prices we are stuck with today. Again we got acclimated and again the urgency to prepare for this day went away. Prices went up a lot and down a little - we hardly noticed. Now that they just go up, we are paying attention.

So here we are. Gas prices are increasing daily and it’s not over yet. Now we are scrambling to produce more fuel-efficient cars, hybrids, all electric vehicles and fuel cells. The urgency looks like it’s here to stay. Gas-guzzling SUVs are not selling like they were a year ago and the used car price of some older econo-boxes is rapidly appreciating. Government mandates for fuel-efficiency seem almost silly, as the market is now the predominant force driving auto manufacturers. And if you still wanna play, you’re gonna pay - that’s how it works in a free market. Priorities are now shifting towards public transportation, telecommuting and other alternatives that reduce the demand for market priced fuel. Eventually, the price will stabilize.

But it won’t be at $2.00 per gallon - ever again.


Andi said...

Thank you for sharing your opinion. I can remember when gas was MUCH less than 2 dollars/per gallon...and we were complaining. I wonder if cars will eventually become something only the ultra-rich possess....sounds like this won't be the case (but you never know).

Michele sent me. :-)

Andi said...

Also, this was a very informative posting. :-)

kenju said...

And I am crying in my beer on a daily basis!

Thumper said...

I remember being upset when it hit 70 cents a gallon. I'm definitely upset now...we're managing the prices but I know a lot of people who are honestly having to choose between food and gas, and that bites.

Anonymous said...

Here In Australia, its just gone up to about $1.56 per litre and of course still rising and of course for the beginning of the long weekend it happen to go up. It should be going up again in about 4 weeks time as the school holidays start.

But I choose to play since I own a big Chev Suburban and our other car is a Chev pick up and of course the car we are doing up is an old 59 Chev El Camino.

Bring on the shopper petrol dockets, save 4c a litre...sometime its 8 cents....

That's why I go to

Anonymous said...

mike, i don't know what gas is over here, but i know my brother is struggling to survive as a self-employed courier....

.....i wonder sometimes if capitalism is imploding on itself

hope you are well my friend

Snaggle Tooth said...

Also keep in mind the European gallon is 20 ounces more than the USA standard- but they all go by the litre as well for petrol use.

This week I'm going to see about fixing up the ancient bicycle that's been in storage the past decade, just to get smaller errands done.

I bet the boat rides will slow way down around here also! it's turning into a very expensive hobby, altho there are many boats moored around here now.