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Record
High Gas Prices Await Memorial Day Travelers |
Posted:
05.26.04
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Gas prices around the United States, driven by increasing oil
production costs, are hitting record highs this season as families
begin planning summer vacation travel.
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As more than 30 million Americans prepare to hit the highways
this Memorial Day weekend, motorists will have to deal with more
than just backseat drivers and traffic. On Wednesday the average
price of one gallon of regular unleaded gasoline hit $2.06, up
more than 5 cents in just a week and about 51 cents since last
year.
 The
hike is part of an ongoing trend in the cost of gasoline. Since
March, prices have been on the rise. These price hikes have people
worried that consumer spending, the largest measure of how well
the economy is doing, could be affected. Economists say that if
Americans have to spend more money on gas, they'll have less money
to spend on other goods and services and as gas prices go up so
do the cost of things like food and other products.
So far, the state most affected by high gas prices is California,
where drivers pay an average of $2.36 per gallon, according to
AAA. The lowest prices are in the Southeast: in South Carolina
drivers spend about $1.89 per gallon.
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Causes of
the hike |
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The high cost of gasoline is driven by increases in the cost
of crude oil - oil in its most natural form - and the current
trend in
rising oil prices can be attributed in part to high demand around
the world. For instance, during the upcoming summer vacation season
in the United States, families will use their cars for long trips
and require more gas.
Prices also are affected by shortages of crude oil at refining
plants that turn it into gas and other products and by uncertainty
in the Middle East, where a majority of the world's oil is produced,
over the political upheaval in Iraq and terrorist threats elsewhere.
 The
United States likes to keep about 700 million gallons of crude
oil in storage in case of national emergencies. Right now, the
reserve is down to 658 million gallons, according to a Bloomberg
business news report, and President Bush has refused to divert
oil going into the reserves and put it out on the market.
"In my judgment it does not rise to the level of a national
emergency," the president has said of the high price of gasoline.
In Iraq, the fourth highest producer of oil in the world, oil
production has been slow to recover after more than a decade of
war and continued acts of vandalism and sabotage.
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How this
affects the U.S. |
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Here at home, increases in gas prices may only affect the individual
driver by a few dollars and may affect home heating bills, but
the largest cost could be the indirect cost of food and other
goods.
 Because
many American cities rely on cross-country truck drivers to deliver
their goods, if the cost of gas for an 18-wheeler that uses between
50 and 100 gallons of fuel goes up, the cost to the driver goes
up and eventually leads to higher prices for the consumer.
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What can
be done? |
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In order to control rising gas prices, U.S. officials have approached
OPEC, the Organization of Petroleum Exporting Countries. OPEC's
11 member countries provide most of the world's crude oil.
In a classic supply and demand scenario, if OPEC countries were
to increase their oil production and the demand for gas stayed
the same, the price of gas would go down.
But, at its bi-annual meeting in March, OPEC decided to put a
cap on how much oil it would produce, regardless of demand. Last
Friday, U.S. ally and OPEC member Saudi Arabia, the world's leading
oil producer, promised to increase its output to meet the now
skyrocketing demand and to try to convince other OPEC members
to do the same.
 "We
are willing to increase production to capacity if that is necessary
to meet demand to try to cool the market," said Saudi Oil
Minister Ali al-Naimi, in a CNN report.
That increase, however, takes time to affect the cost of gas
at the pump, since it must first be refined, so prices are expected
to continue rising. In the meantime, Americans can try other methods
to save on their gas bill:
- Drive the speed limit - according to the U.S. Department of
Energy, driving faster than the speed limit uses more gas. Each
5 mph you drive over 60 mph is like paying an additional 10
cents per gallon.
- Keep your car in shape - a good tune-up can increase gas mileage
by 4.1 percent.
- Use public transportation or carpool.
- When purchasing a car, select one that gets the best gas mileage.
--
Kristina Nwazota, Online NewsHour |
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Yes it's true that he came to the United States illegally, but ever since that he has only done positive things. He has a job, pays taxes, does volunteer work, raised a family, and so many other things.
