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The Psychology of Gas Prices

May 6, 2011

Has anyone noticed that in the last couple of decades, the price of oil has been driven to the point that people think they will no longer make ends meet. Then magically it drops to where it is usually around one dollar higher than the previous year and everyone is happy. Well maybe not as much happy as relieved.

The reason I brought this up is, the media is reporting that gas has fallen two cents nationwide. They also are reporting that with in the next couple weeks the price will settle in around a dollar higher that last year. Yes these are the same so called experts that said, five dollars by June. So take it for what it’s worth.

The oil companies have noticed this also and will continue to take advantage of this Psychology until we act as one people and figure how to stop them. With in the last three years I have seen a number of Mom & Pop stations go under because they cannot come up with the cash to buy the next load of gas.

A few years ago I ask the owner of the B.P. Station that use to be in Wellsburg West Virginia, “Why is it when we here that the price of oil has went down, the price of gas stays the same or goes up in price?”

“That is because the privately owned stations are trying to recoup their losses from the last load or, we know the load after this one is going up”, he said.

Outside of Berkley W.V. there is a B.P. station that does not accept credit cards when you buy anything inside the store, because he has to make his living off of the cakes, soda, and other groceries. He hardly makes enough money on the gas to cover the cost of selling it.

Now, is it sad that we are totally dependent on petroleum? Yes it is. Should we dump gas powered engines and move over to electric powered vehicles? I don’t really think that is the answer.

I also don’t think that it is financially feasible (for the consumer) to switch to ethanol or boost the percentage of ethanol mixed in the gas. The use of ethanol in a modern day automobile breaks down the rubber hoses and parts faster than just gas. The biggest thing the environmentalist should look at is, it takes more energy to make ethanol and is not worth the environmental impact.

The amount of energy it takes to charge a battery and make a gallon of ethanol, it doesn’t make sense to make the change. Refining the ethanol also pollutes the air, water, and land. The same for powering electric cars.

Do I have the perfect answer to cut the cost and curve the pollution? Well no. However, I do know you don’t burn your food for power. Not for long anyway. Within the short period of time that ethanol production was raised, the price of grain foods have gone up.

We are not dependent on Middle East oil. Eighty percent of our oil in the U.S. comes from Canada.

According to Sullivan (and contrary to claims by many that the U.S. buys oil from its enemies), most of our oil is imported from non-Muslim states. About 80 percent of our imported oil comes from Canada (1.9 million BOPD), Mexico (1.2 million BOPD).

So if you have a good answer for how to get off oil and lower the cost of travel, without polluting more, and starving the population, please leave a comment.


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