Got Gas!

I recently read an interesting article that was published in the Chicago Tribune from their Los Angeles affiliate about the gas prices that are expected for the Spring and Summer of 2012. A Los Angeles Times article by Ronald D. White indicates that all projections point to a cost of $4/gallon by Spring with gas spiraling upwards up around $5/gallon by Summer time. Are you curious yet – http://articles.latimes.com/2012/jan/14/business/la-fi-gas-prices-20120114 

Part of the justification for rising gas prices stems, according to the article, from high oil prices and brisk fuel exports, according to Ronald White (ron.white@latimes.com).

As I stopped to consider the ramifications of these gas prices in our daily lives, I asked myself one basic question – why haven’t I heard any type of negative response or reaction from anyone who is impacted by the rising cost of gas?  I know in my job as a Realtor I spend quite a bit of time driving to service my clients.  And yet this news story, which also has received some minor attention from local radio stations did NOT seem to create any type of concern OR comments from anyone!

I took the opportunity to go back and pull out some old gas receipts in an attempt to research how much gas has risen in the last few years.   Though you can isolate any 2-year range, one 2-year period  jumped out at me – in December of 2008 gas was selling for $1.599/gallon.  If you go to November of 2010 gas jumped up to $2.789/gallon. This represents roughly a 74+% increase in cost to us, the consumers.   Why?  In my business I certainly have never been able to experience an almost 75% increase in my margins yet we seem to blindly accept that this must be the way it has to be!

I think that every year for the last few years the oil companies, investors and analyst have always tried to find a way to explain to the consumers why the anticipated price increase is appropriate. The bottom line is every year they have offered the same reasons (seasonal blend, demand, political instability somewhere, blah, blah, blah) as to why our threshold for pricing should be different and every year we seem to accept this without so much as a complaint or public outcry.

So as you think about how you can do your part to stimulate the economy consider this – every time we jump into our vehicles in attempt to make that economy-stimulating purchase, the only ones benefitting from this are the oil companies, investors and the like who hedged their bets (and possibly manipulated supply??) that we need to continue to drive. I believe every business organization is entitled to profits but the reasons cited year in and year out do not seem to have as much merit now as they did when the Oil Industry first tried to explain why the increases were necessary.  As you review my summary below of my gas expenditures see if it helps you consider one basic question – Why and what can we do to change this? 

   
Date & Year Price Per Gallon AVG PPG/YEAR
1/11/2007 $2.269 
2/10/2007 $2.189 
7/10/2007 $3.089 
12/5/2007 $2.929 
  AVG Price Year – 2007 $2.619
  
2/2/2008 $3.079 
7/1/2008 $4.179 
9/1/2008 $3.859 
11/1/2008 $2.679 
12/9/2008 $1.599 
  AVG Price Year 2008 $3.079
  
2/4/2009 $1.849 
3/11/2009 $1.969 
12/2/2009 $2.639 
  AVG Price Year 2009 $2.152
   
2/3/2010 $2.799 
2/7/2010 $2.659 
7/2/2010 $2.839 
10/7/2010 $2.929 
11/1/2010 $2.789 
  AVG Price Year 2010 $2.803
    
2/1/2011 $3.299 
10/2/2011 $3.399 
  AVG Price Year 2011 $3.349

 

 

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