Before the second invasion of Iraq, gasoline in the US (depending on where you lived, cost of living, and state taxes, of course, hovered around $1 and $1.25, IIRC. When gas began to rise sharply in the US, to approximately $5 or so a gallon, things began to change quickly in the country. SUV sales plummeted, people began travelling less for leisure, and there was a genuine concern about the long-term implications of $5-$6 + for a gallon of gas.
Gas prices then began to come back to earth a bit. Never to hit the pre-war pricing, but I remember it slipping below $2 a gallon, and things seemed to get better at the pump.
Throughout this entire time, there was never a gasoline shortage that I can remember. Fuel was never being rationed, there were no even-odd days (old folks remember this from the 70’s), or any other major indications that oil was being withheld and/or rationed to the US.
Cut to now, and where I live. Gasoline has been increasing in price slowly and steadily for the past 8 months or so and just broke through the $3 price point again. My question is why?
Is this a simple matter of gas companies raising prices as far as they can so they can maximize their profits? I haven’t heard one complaint about gas prices this time around. It’s almost as if the first go around with gas prices was to prime us for this one. Whereas before, gas prices over $2.50 a gallon were hard to imagine, now, $2 is hard to imagine. A nice marketing trick, but not based in any sort of supply/demand philosophy I’ve ever studied. And since folks aren’t complaining to their congresspersons like they once were, it’s not at the top of anyone’s agenda to figure out why in the world gas is so damn high.
I thought of the gulf accident by BP, but that has never been raised as a possible cause. As far as I know, no country is cutting production. There is no conspiracy by the oil producing countries of the world to stick it to us.
In any event, I would think that for what we did for Kuwait in the early 90’s, they would fill up every oil tanker we could get there at a reasonable price. I think the US could also take as much oil as they wanted to from Iraq. Assuming this war is really for the people of Iraq, I would think they’d want to keep us there and happy. One of the ways to make us happy is cheap oil. Or hell. I’ll be cynical and throw out the idea that we take the oil and pay what we want for it (if at all).
So, my question is… why has gas risen to over $3 a gallon, and 1) will it continue to rise or 2) will it ever fall? I know our former president Bush is invested heavily in oil, but I’m trying not to think that he can keep oil prices inflated while out of office.
(current price of crude - $87.82