Viewpoint: High gas prices should lead to new travel habits

By Erin Schell
April 6, 2006

The $60 it costs to fill up a car’s tank today could have gone a lot further in years past. In 1966 it would have bought 60 gallons of milk, 167 gallons of gas in 1976, 273 stamps in 1986 and 45 dozen eggs in 1996.

“There can be no more compelling evidence that the price gouging and market manipulation which has produced record oil prices is out of control, and is working to serve the forces of individual greed and corporate gluttony at the painful expense of millions of American consumers,” stated an outraged Senator recently. The Senator is not the only one feeling helpless and disgusted at the steadily increasing price of gas.

Even some smaller gas stations are boycotting the high mark-ups by not selling gas at all. One private gas station owner explained that while he has never been told that he can’t purchase gas or that there is a shortage of gas, he is paying 40 cents more per gallon than the chain distributors.

A recent CNN poll showed that 69 percent of American families feel that the increasing gas prices are causing them personal hardship. “Recent government and industry data show that America’s consumption of gasoline is not rising as rapidly as it was this time last year, and analysts say families living on fixed or modest incomes usually are the first to cut back.

If prices continue to rise, other demographic groups expected to trim their gasoline consumption are young adults, who tend to have less pocket change than their elders,” stated an article on CNN.com. For those on fixed incomes or in the lower quintile, paying over $3 for gas is just not an option.

That’s where mass transit comes into play. While it may not be the most luxurious way to travel, it does save a pretty penny on gas. Mass transit may be just what the economy needs. With the money that is saved on gas, spending in other areas such as dining, houses, automobiles and general expenditures can increase.

While there might be some quick answers for why prices have increased, such as Hurricane Katrina, the turmoil globally and the shortage of Ethanol, extracting oil at $20 a barrel and then selling it at $70 a barrel is just hard to explain using simple supply and demand.

The politicians who are finally starting to take notice to the possible price gauging are telling Americans that the record high prices are directly related to Big Oil’s record high profits. Last year, the oil companies saw a profit of $111 billion, according to MSNBC news. Although President Bush is calling for reforms and throwing billion dollar incentives at the oil companies hoping to cauterize the increasing gas prices, taking in a lower profit would be unacceptable to oil shareholders.

Unfortunately, there is little that the President or Congress can actually do to affect gas prices. With as many as 30 separate investigations into oil company price gauging showing no signs of foul play, the prices can continue to shoot skyward. Still, political leaders are not letting oil companies off the hook. “Anyone who is trying to take advantage of this situation while American families are forced into making tough choices over whether to fill up their cars or severely cut back their budgets, should be investigated and prosecuted,” House Speaker Dennis Hastert, and Senate Majority Leader Bill Frist, wrote in a letter to President Bush.

Cutting back gas prices in the immediate future may be on the minds of all Americans. If alternative measures are not taken soon, it could be detrimental to many related industries. There was a profit dip experienced by many automobile dealers after the hurricanes last summer.

If Americans can no longer afford to put gas into their cars, will gas powered cars become obsolete? If so, alternative powered cars like hybrids or lithium powered cars may be the cars of tomorrow. Either way, it is something that should be looked into now instead of waiting until gas reaches $6 a gallon.

Until that day comes, there are some small things that can save money right now. According to MSNBC Automotive, decreasing your speed from 65 to 55 can save 25 percent on fuel. Also, reducing the amount of weight in your car as well as on your car’s roof rack can save about 2 to 3 percent.

One analyst even suggested that if everyone would drive just 3 percent less, gas prices would come down. Still, Americans aren’t ready to hang up their car keys permanently yet. But if gas prices continue to rise, Americans may have to rethink their consumption habits and dust off that old bike in the garage.

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Erin Schell

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