Monday, April 23, 2007

$4 gas - coming to a pump near you!

(For a dedicated transportation cyclist, this story may be only a matter of detached curiosity. I like to think that $4 gas might encourage somebody else to give the 2-wheeler a try.)

According to Bloomberg:

Whether it's $50 to fill up your Prius or $130 for the Ford Expedition, $4-a-gallon gasoline is coming to a pump near you. ... "What we're surprised by is the increased demand," said James Mulva, chief executive officer at ConocoPhillips, whose refineries from California to New Jersey produce 56 million gallons of gas a day, enough to meet 14 percent of the country's needs. "Even though the price of gasoline is up, the demand is up."

Click HERE to see the complete story.

So... if people will gladly pay $4/gallon, Conoco Phillips and the others would be fools to sell for less... no? Maybe they'll pay $5. Why not find out?

(Danielo contends that people say they will drive less when gas is $4, but so far they're not putting their money where their mouth is, but rather into the gas pump.)


Smudgemo said...

Funny how supply and demand aren't supposed to affect gas prices. Everyone complains that oil companies are making record profits and charging high prices, but if demand is there, why shouldn't they charge what the market will bear? That is capitalism, isn't it? (Generally speaking of course. Government subsidies for the industry are an entirely different issue.)

I quit. I'm using my gas money for beer.

Anonymous said...

Is there an index, or monitor, of vehicle usage? I'd like to see it plotted against gas prices. I suspect there'd be a slight correlation. When prices spike, I suspect people try riding the bus or carpooling for a day or two, maybe even a week. Then, they fall right back into their addiction.

Bikeboy said...

I bet people try to consolidate their errands a bit more, due to 'spensive gas. (The missus will get ketchup AND brown sugar when she goes to the store, rather than a separate trip for each - hahaha) If I were in the business of selling Hummers and Ford Excursions and Dodge Super-Ram Macho Diesel-Dually pickup trucks, I'd be a little bit concerned.

Apertome said...

It really is strange how inelastic the demand for gasoline is. I do hear people saying they'll drive less, but they never do.