Gas Prices: Down Lately, But Up 30% From 2010

Gas PricesMost of the media coverage about gas prices lately is focused on the fact that they've fallen from a national average of $3.98 to $3.58 in about two months according to the AAA Daily Fuel Gauge. What's rarely mentioned is that the cost per gallon is still 30% higher than it was this time last year, when a gallon cost $2.75. The price has still been over $2.60 since March 2009. The recent run-up to nearly $4 only lasted seven months.

The real question with gas prices is how high is too high? The answer is that the economy might have been able to support the consumer and business impact of $2.75 gas prices when GDP was beginning to recover in the second half of 2010 and unemployment began to ease.

The case that the nation can accept what are still relative high prices gets harder and harder to make by the day. Unemployment improvement has stalled and more than 6 million people have been employed for over half a year. Many of those people already live on a shoe string. The cost to fill up a 15 gallon tank is $41. That might not seem like much unless the person who has to pay is out of work.

Even Americans who work still have trouble with gas prices in many cases. The cost of commuting over a month is about $200 for a 50-mile daily round trip commute. That doesn't include weekend travel. A family with a household income of $50,000 -- about the national median -- only nets $2,800 a month after taxes.

The effect on business is harder to calculate across the entire economy. The industries that are bearing much of the weight of higher fuel prices are those in the nation's transportation infrastructure. Shares of American Airlines (AMR) are off more than 20% in a year. The DJIA is up by 20% over the same period. Restaurants, retailers and other companies that need to move goods will continue to have earnings margins pressure that they did not have a two years ago. And high gas prices are piled on top of high prices for other commodities which effect profits across the economy. It is a vicious cycle for the consumer, who has to pay more for essentials.

Gas prices may be down recently, but that is only relative to the first half of 2011. A 30% increase in one year is still too much for the U.S. economy to bear.


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bill81237@aol.co

i think your full of ****.

June 30 2011 at 3:51 AM Report abuse rate up rate down Reply
cadillac47

When will we learn Since 1974 We've been experiencing extotion from the Oil conglomerates AND from our own Government . 74 was the 1st oil crunch price of fuel doubled (unbeknownst to us most of the oil companies had tankers sitting in the Atlantic waiting for the price to double ) once the price was where they wanted it there was no more fuel crisis its been a yearly event since Question??? if oil is at $90 to 97 a barrel why isn't the price dropping like a lead balloon ???????????

June 29 2011 at 8:27 PM Report abuse rate up rate down Reply
1 reply to cadillac47's comment
Sam

Extortion requires coercion, often involving the requirement of a payment of money or property to halt future violence. Oil companies have never threatened consumers with violence (although government frequently does).

June 29 2011 at 11:04 PM Report abuse -1 rate up rate down Reply
joelaher

The two best ways to bring down gasoline prices focuses around two concepts: supply and demand along with determining who can buy oil futures.

The more oil on the market, particularly from our own deposits, lowers the cost on the open market. Secondly, allowing oil futures to be purchased as gambling instruments, not on any chance what so ever of buying the oil, makes spot prices simply a casino game investors play at our expense. By requiring that those buying oil contracts must be end users, it would eliminate the speculation game currently being played.

June 29 2011 at 12:07 PM Report abuse rate up rate down Reply
1 reply to joelaher's comment
bggdg

Speculating on oil futures has no net impact on prices. First, speculators are able to make (or lose) money by being short just as easily as they can make ( lose) by being long. In other words, they have no vested interest in the direction of oil prices, only that their bet on the direction is an accurate one. Even more importantly, every long position must be closed by a matching sale, just as every short must be closed by a matching purchase. As a result speculative buying and selling is exactly equal. The ONLY difference caused by futures speculators is additional market liquidity.

June 29 2011 at 12:21 PM Report abuse rate up rate down Reply
palyzuc

...and oh by the way, what happened to the 'traditional' increase in gas prices as we head into the "summer driving season"? Prices all of a sudden are going down, amazing ! Whether the fault is with the refiners, the acquirers, the speculators and or whoever, the public is paying the price and people affiliated with the industry are getting fat ! We can only hope that demand continues to drop...like a rock!

June 29 2011 at 8:58 AM Report abuse +1 rate up rate down Reply
stinkyheadzzz

Bad math dude 15 gallon fill up @ $3.50 a gallon = $52.50

June 29 2011 at 6:04 AM Report abuse +2 rate up rate down Reply
SilverGoldSean

In 2006 Oil was about $50 a barrel but it cost 5.5 ounces of silver for the same barrel. Today oil is over $90 a barrel but it cost 2.74 ounces of silver for the same barrel. Has the price gone up? Has the price gone down? Check out the numbers at http://silvergoldconversions.blogspot.com/

June 29 2011 at 12:24 AM Report abuse -1 rate up rate down Reply
bggdg

Mike
tjdwill01
bggdg
Why replace it?******** Then it wouldn't be a reserve, Now would it, Gomer ?
Sorry about that bgdg didn't get tjd copied the first time

June 28 2011 at 10:25 PM Report abuse -1 rate up rate down Reply
1 reply to bggdg's comment
bggdg

tjd, when you are too dumb to answer a simple question, it's usually a bad idea to attract attention by prancing about in your pointy white cap.

June 28 2011 at 10:27 PM Report abuse rate up rate down Reply
ANTON

Funny how many people posted on these AOL boards in 2006/2007 blaming Bush for the high gas prices. I still have many of those posts, "he is in oil" it is all his fault. I wonder how many of those same people are now blaming Obama? He is the President, must be his fault. What most do not realize is that the President does not wake up one morning and say to himself, "hmm, I am in a bad mood, I think I will raise gas prices", and "I never liked the color green, I want all green lights changed to blue." The President must send any legislation to Congress who must then approve it, then it has to pass the Senate and then the President can sign that legislation, but Congress would not waste any time voting on something stupid like rasing gas prices. OPEC controls the price of a barrel of oil, not the US President. Obama also extended the Bush tax cuts and he extended the very unpopular "Patriot act" that everyone accused Bush of being King George for the assault on American freedoms with the patriot act. As a President, the buck stops here, if you extend it you are just as guilty for doing so. My point is to everyone, it does not matter who is in office, Bush, Obama, Democrat or Republicna, liberal or conservative the rich get richer and poor stay poor. It has been this way since FDR. Nothing changes except the name of the person sitting in the oval office. So half of you can keep blaming Bush and the other half can keep blaming Obama but it makes no difference. Big business gives them millions to get elected and then they owe them favors. What do the middle class give candidates? We give them our votes on promises of no new taxes and real change but then they get elected and forget about all that until re-election time. Seriously, look at the last four Presidents, Bush, Clinton, Bush, Obama, 23 years of these bozos, I would not be comfortable letting any of these guys paint my house much less run the country. Moe, Larry, Curley and Shemp could have done better than Bush, Clinton, Bush, Obama. Do any of you really think Obama or Bush aare looking out for you? Puh-lese!

June 28 2011 at 9:54 PM Report abuse rate up rate down Reply
Greg

Don't like the price of gas? Move to an urban area where there is mass transportation, or trade in the SUV, or think seriously about the house you're about to buy in the suburbs, etc.

We all have choices.

June 28 2011 at 9:40 PM Report abuse +1 rate up rate down Reply
Bob and Linda

where is the dumd a-- writer filling up a 15 gallon tank for $41.00. Do the math thats 2.73 a gallon. Maybe they they can tell all of us where to buy it for that

June 28 2011 at 9:28 PM Report abuse rate up rate down Reply