THE RUGGED INDIVIDUALIST                     

History of Gas Prices

Americans love their cars. No other country puts such a high priority on the individual being able to get in their own car and drive where they want without relying on public transportation. And rightly so. People's automobiles are an expression of themselves, carefully chosen and sometimes customized. If everyone relied on mass transit. If the government forced the personal automobile to become obsolete through regulations or making it cost prohibitive, that would be a giant step to collectivism.

We have become accustomed to fluctuating gas prices. We complain when the gas price is high and rejoice when prices come down, even just a nickel. But why does gasoline fluctuate so much?

The experts will say: supply and demand, peak oil, future traders, the commodities market, OPEC, politics in the Middle East, , emerging markets, pipe line problems, oil spills, icy weather, the limited supply, we are running out, and inflation. (Inflation is actually a real reason).

The chart below displays average gasoline prices from 1950 to 2010. Please note actual daily prices are much higher and lower then the yearly average. The inflation adjusted price chart below shows inflation adjusted fuel prices from 1918 to 2006. Please note inflation is considerably higher now.

The fact that you can go to the grocery store and buy every kind of fresh produce, fish from around the world, dairy products without constant weekly fluctuations in the price, is a statement in itself. Why is the energy that we depend on so much, going up and down every week? How can it be less expensive to buy a gallon of milk (which has to be refrigerated and is perishable) for less money than a gallon of gasoline.

Well the answer is big government. If the government did not regulate the industry to death and let Americans produce, the supply would be consistent and abundant. Crude oil does not require refrigeration and can be stored for millions of years. There is an abundance of crude oil in America. There is more oil in the Bakken oil fields then in Saudi Arabia. And to make matters worse, in addition to all the regulation and fees, the oil companies pay, Americans pay up to $.61 a gallon in taxes.(See chart below)

Regulation.

About 5% of regulation is about actually protecting our environment and the safety of our citizens. About 40% of regulation makes it very difficult for small businesses to compete with the big oil companies. About 40% of regulation is just bureaucracy, the government making it difficult for everyone. About 15% of regulation helps foreign oil companies.

The BP oil spill.

The oil spill In the Golf of Mexico was tragic on many levels. Property was destroyed, men died, the beaches suffered, the environment was tainted and the government used this crisis against its own people. This page is about the history of gas prices so the following is just a couple bullet points to show our government does not have our best interest at heart when it comes to pain at the pump. All of the functioning drilling rigs in the golf were shut down. But not Mexico's drilling rigs, not Brazil's drilling rigs. 20,000 Americans were laid off, even while foreign countries drilled in the same areas. Our government even guaranteed loans and helped the Brazilian oil company. And while oil was rushing to our shores, countries with skimmers capable of picking up 10s of thousands of barrels a day were turned away. I guess our government thought we didn't need the help. Or were they trying to make the crisis bigger than it was. When disasters happen make it right, not punish the American people.

 





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