A look at U.S. gas price charts this week shows the cost of a gallon of gasoline moving ever closer to $4 a gallon. And if you look closely at price charts over the years, you’ll see something else: a pattern of springtime price hikes.
That’s right. Prices vary a lot from one year to the next, but whether they start out low or high, they tend to rise this time of year as refiners begin to suspend operations to switch the type of fuel they make for summer – which leads to less supply and higher prices. What that means this year is that – while we’re all tired of talking about this disturbing trend and even more tired of paying so much at the pump – it’s likely to get even worse in the coming months. U.S. gas prices, which broke an old record in mid-March, are not likely to peak before the end of May.
If it’s beginning to look a lot like spring across the U.S., this gas price predicament calls to mind Groundhog Day. The movie Groundhog Day, that is. We’re all well aware that U.S. energy policy needs to change and domestic oil supply needs to increase in order to bring gas prices down to more affordable levels. But despite the fact that we hear save warnings every year, our policymakers make the same mistakes and fail to act.
In today’s economic environment where budgets are already tight, we’re seeing signs that our nearly $4-a-gallon gasoline is pushing more families to a breaking point. This informal poll shows the vast majority of households are cutting back on other expenses to adjust for the increasing amounts they’re paying for fuel. Other polls show more than one third of Americans and close to half of those earning less than $50,000 a year consider gas prices a serious hardship. Data from the Bureau of Labor Statistics show that, among the lowest-income Americans, gas costs account for more than 10% of income. And a sudden drop in consumer confidence in March has been attributed to the 17% rise in gasoline prices so far this year.
Certainly a renewed commitment today to producing more of our vast domestic energy reserves would contribute to improved consumer confidence and might also bestow some confidence on the oil markets. But what is really needed is a sustained commitment to changing our ways and adopting a better domestic energy policy that is based more on, well domestic energy, better conservation, and less on foreign oil. Otherwise, we only have more of the same to look forward to.
