What's UP With Gasoline Prices?

Oil and gasoline prices continue to rise. As I type this, prices in the Dayton, OH area have jumped today to a record (for this area) $3.599 per gallon of 87 octane gasoline, led (as usual, in this area) by Speedway stations setting their price at a level for the region, and other non-Speedway stations quickly following Speedway's lead.

There are many "reasons" (I like to call them "excuses") given for the rise in the prices of oil and gasoline: unrest in the Middle East; unrest in Nigeria; OPEC production levels being too low; greed by the big oil companies; commodities speculators driving the prices artificially high; a surge in oil usage by developing nations such as China and India; a weakening dollar; change over from winter to more costly summer gasoline formulations; no new oil refineries being built in the U.S. for decades; restrictions against drilling for oil off the coast of the U.S. or in other areas of the U.S. (ANWAR comes immediately to mind); and others that just don't pop into my head at the moment.

But the bottom line comes down to this: the prices keep going higher because people keep using the product, despite the higher prices.

I've heard on various news broadcasts that there has been a slight decrease in driving over the past few weeks by some people. But overall, in the eyes of the people who profit from the oil and gasoline industry, demand is high enough to justify the prices being where they are, because people are still purchasing the product.

I've heard a number of different ideas as to how to make prices go down. Usually the ideas have something to do with boycotting a certain brand of gasoline or not buying gasoline on a certain day. But those things simply will not work, because they don't make the overall demand for gasoline go down--they simply shift the demand from one company to another or from one day to another.

The problem is that in order for a boycott to work, it's got to cost something to both the one being boycotted and the one doing the boycotting. It's kind of like when a union goes on strike against a company; it costs the company because its business stops working, but it also costs the people on strike something because they do not receive their regular wages during the strike.

Basically, the only boycott that I can see having any effect at all on the prices of oil and gasoline would be if there was a nation-wide, day-long (or longer) boycott from driving. By not driving, the demand for the gasoline would go down, thereby costing the oil and gasoline companies something. By not driving, it would cost a person convenience and maybe even money, for instance if that person chooses not to drive to work.

I'd like to be optimistic and think that something such as this could work. But the reality is that the attitude of too many people would likely be that they will let someone else do it. It's kind of like the independent trucker's strike that was called for a couple of weeks or so ago--a few truckers followed through with the strike, but a much larger percentage of truckers just went on with business as usual.

For a high percentage of people, they feel it would cost them more to stop driving for a day than it would save them on paying for gasoline. So get ready for gasoline prices to continue to increase until such time that the high prices significantly reduce the amount of gasoline that is consumed.