Thursday, May 24, 2007

Why is the Gas so expensive this Memorial Day?

Its Memorial Day weekend, and the news goes on and on about how the high gas prices will affect people's travel plans - or not. If you ask me the most affected probably weren't planning to travel to begin with - the high cost of fuel has resulted in high 'everything' prices, meaning there's less money for any kind of fun once the necessities are covered. Most folks have (or recently had) some discretionary spending that takes up the slack in these tough times - but most everybody is feeling the pinch right now!

People are wondering what's really going on, and for good reason. What we hear on the news is too brief & shallow to make much sense. There is generalized railing against the situation but little in depth reporting on any plans to alleviate it, just 'blame game' noises & announcements of possible taxes to cover vague plans. No one has much to say about when or if it will end. Texas took a hit on their state taxes to try and help their everyday citizens & good on them! God grant they see some relief from other causes when their tax relief plan has to come to an end.

Which relates to the real question on everyone's mind right now, how long will we have to cope?

We know we can cope for awhile because other people already did - as recently as the 70's- We can manage as long as it doesn't keep just going up and up without end! Our fathers & mothers who lived through World War II managed, and this is much the same. Rapid rises in prices of fuel/food/clothes cause us to ration our own purchases in all these departments & more.

I suspect that many of the frugal stewardship techniques many stay-at-home, homeschooling, &/or country-practical moms & grandmoms already practice will become quite the fashion in coming years, if things continue as they are. We may need to start taking up collections to help each other with gas and other issues inside our churches, as well as increasing efforts to free-cycle, recycle, and make items from scratch within our groups. If you are one of the make-do hold-outs right now, you may find yourself in demand to teach a whole bunch of other people how to manage.

Made me curious as to how Canada, Mexico, & Europe were fairing, so I googled & did some reading.

Mexico can handle the global gas prices for now (as a producer with a state-owned company) but their economy is taking a second-hand hit from the increased demand for corn and other crops used to make ethanol.

Canada is suffering sharp price spikes as well. Its every bit as bad there as in America, which is rather odd, as they are a producing nation. They provide the US with much of our imported fuel.

Most European countries & Japan are coping nicely since they already use nuclear power in a big way for many of their energy needs. Their large public transportation systems covers what are actually comparatively short distances. Many people CAN ride their bike to work there. (Most of us are 10 miles even from the closest grocery store. ) Just the same, gas is going up and this affects their economies as well. They already have high taxes on their fuel, and could follow Texas' lead in cutting those taxes to keep prices in range for awhile if they deem it advisable - but this would affect the many, many services these taxes sustain. Happily, for them, the current effects of oil seem to be generally offset by other gains right now.,,2059708,00.html

but the Ukraine has had a tough time adjusting

But why is it happening? People have been blaming Bush & Cheney because their families are connected to big oil companies, but its hard to imagine they would willingly embrace political suicide. Even as a lame duck president, Bush has his future to think of - as well as his 'legacy' as prez. How well he is treated by his own party will be largely determined by the voter response to the events during his tenure. I am sure he already knows he has a PR problem because of the Iraq conflict. Anyway, the problem has been building since the Clinton years. No, I don't believe Bush is orchestrating this. So who is? His enemies? Ours? Or is this pinch coming because petroleum reserves are running low for real? There were predictions that it would.

Decided to look up what others had to say.

Found several interesting articles. Bottom-line consensus seems to be that the international big oil/refining companies have been pocketing profits & subsidies but not building or even appropriately renovating their aging refineries - then some got damaged. Another stressor is the larger purchases from the increasingly industrialized nations in Asia (especially China & India). These countries have been receiving many of the out-sourcing contracts for items and jobs at all levels & now compete for the supply of petroleum products as well. Its in the best interests of the mega-corporations to see they get it as the primary manufacturers of goods for the globe. The poor economy of many SUVs & increase in optional gas vehicles like snowmobiles hasn't helped the USA either. Any item in demand sees its price go up.

& Who gets the extra cash? Well, its definitely not your local gas station!

None of these reports will help you with that hemorrhaging wallet this weekend. But maybe it will help to know a bit better why we have this going on. Once enough refineries are put back into service, power plants are built, and light rail goes to more places, we should see the crisis should ease for awhile. We can but hope!

Now, I can't honestly say my personal plans for the weekend have been affected. We don't normally party or travel much on this holiday. Cooking outside or seeing a movie is usually the extent of our frivolities. We can still manage that. Prayers for our troops are still free.

1 comment:

Anonymous said...

Add this one too. Karen sent it