2008 Election
Perspective on Gas Prices
Gas took a flying leap today here in Cedar Rapids with prices ending up between $3.41-$3.55 per gallon. An article I was reading regarding one gas station having an influx of customers right before the spike had an interesting little chart generator for gas/oil price data. I created a chart that shows 60-months with of gas (per gallon) and oil (per bbl) in relation to each other.
In the statistical world the chart above shows a that the price of gas has been almost directly linked the price of crude oil. I have added combined the above chart with a straight line chart below which should help emphasize the relationship and point out an interesting variance.
Notice that in April of 2007 the price of crude and the price of gasoline went off on two different paths. The price of gasoline has remained relatively flat from April 2007 to now while the price of crude oil has continued on an upward path. Another interesting item that is shown in these graphs is that there has been a growing separation in the price of gas compared to the price of oil. Back in 2003 the price of each product was very nearly 1 to 1 and you can see that over the last 60 months there has been a growing gap between the cost of the two products.
Bottom line: Yes, it hurts to pay $50 to fill up your tank but the answers to the problems aren’t as easy as some may think. You can’t attack a problem like this with your feelings you have to attack it with your mind and common sense. Also keep in mind how much of the price of a gallon of gas is made up of taxes. There’s Federal, State, and Local taxes to add to the mix. John McCain is suggesting a Federal Gas Tax Holiday this summer. That one thing could do more for the economy in the long run that any other idea being floated. Then again you could opt for the redistribution of wealth mentality and tax the hell out of the oil companies but you wouldn’t want to steal Barack Obama/Hillary Clinton’s ides now would you?
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3 comments for “Perspective on Gas Prices”
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My lord, you’re paying more for gas than I am now…
Right now, redistribution of wealth is sounding pretty good. Having the oil execs all arrested for highway robbery and mass sodomy and held on $18 billion bail sounds great. After all, too much of our wealth has been redistributed into their bank accounts, it’s about time we get our money back.