Gasoline: it’s a hard knock life

A few of occurrences this past week caused me a bit of angst. After the first I felt vetted and affirmed concerning my sentiments toward the current oil issue. After the second, however, I was not so complacent with my sentiments. Currently, I am somewhere between the two.

Exhibit one: While cutting grass (an accurate but meaningless detail), I thought of a story told by a close friend of mine whose family owns a relatively small cherry farm in northern Michigan. The government mandates that each farm literally throws away a portion of their crop. I imagine a stinking pile of wasted cherries that could have been sold, donated to hungry people or turned into a gigantic cherry pie.

The waste is an important price stabilizer that fluctuates according tot he size of the crop season. Notably in 1995, 36 percent of the tart cherry crop was restricted from primary markets in an attempt to stabilize prices during an extremely productive season.

Though the cases are drastically different (i.e., in the cherry case a seeming unlimited supply and small demand, in the current gas case, clearly limited supply and a large demand), the market’s handle on oil prices is quite tenuous. Thus feeling accomplished after the mighty aforementioned analogy, I continued to cut grass and feel sorry for how rough life is when I have to pay nearly four dollars for a gallon of gasoline.

Exhibit two: While driving, I casually noted to my passenger, “Are you surviving the gas prices?” “Yes,” he responded as I remembered that he rode his bike everywhere.

“Pretty out of control, don’t you think?”

“Actually-”

Uh-oh, I thought.

My friend continued, “It is about time that the U.S. market has to catch up with the average prices.”

The average gasoline price per gallon for the U.S. is $3.61. Around the world, however, gasoline prices similarly soar and much higher than in the U.S.. Belgium, France, Germany, Italy and the U.K. all pay at least $8.32 per gallon. In the Netherlands, the price of gasoline is $9.52.

Perhaps as the prices of gas increase, the initiative for both alternative fuel technology and mass transit will also increase. Time will surely tell, but what is certain is that the average consumer cannot and, probably, will not continue to prefer higher prices at the pump to alternative initiatives.

So while I am done fighting with myself over the reality of the gasoline dilemma, that does not mean that the questions are answered. Can the gas-opoly be fought at all? How should I feel about paying $3.61 when other countries pay nearly three-times that price for gasoline?

As a citizen of the land of the free, it is a odd feeling being shackled to a pump.

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