Thursday, March 4, 2010

Gas prices up, and rising

Posted By on Thu, Mar 4, 2010 at 12:06 PM

AAA's graph of gas prices is a little shocking, but definitely worth studying. Did you realize gas prices are up about 75 cents since this time last year? It's been a slow, steady increase, hardly noticeable unless you track these kinds of things or are working with an already overstretched budget.

The bad news, according to David E. Parsons, President and CEO of AAA Carolinas, “North Carolina motorists should be prepared for gasoline prices to climb upward significantly as we approach the summer travel season.”

Boo, hiss to that.

In good news, the organization's press release ends, "Barring any unforeseen circumstances or catastrophes, however, the rise should be less dramatic than past years."

Wondering why gas prices are up? The reasons are many and, frequently, complex. To sum up: We're not the only consumers who use oil in the world — there's a lot of competition out there for this finite resource. And, when the world isn't at peace (Is it ever, really?), the people who price these types of commodities worry and hedge their bets by raising prices.

Also — no surprise here — thanks to the economy and the resulting double-digit unemployment, people are driving less. Since big oil companies aren't willing to sacrifice their record-breaking profits, the solution they've sold themselves is to raise prices to protect their over-inflated bottom line.

You should also know, in the U.S., several refineries are off line for maintenance. Or, as the press release puts it, "A few refineries around the country have temporarily completely shut down production for maintenance or other various reasons, thus reducing gasoline production."

"Other various reasons."

Other various reasons like limiting supply to balance with demand in an effort to, as I mentioned before, protect the swollen bottom lines of oil companies able to boast greater cash reserves than most countries? Could be. It's difficult to say. I don't know about you, but I find explanations like "other various reasons" to be a little on the vague side of full disclosure.

In the end, our part in this financial game remains the same: If you want to drive, you have to pay the price at the pump. Of course so does CATS, so do taxi companies, so do trucking companies, so do delivery companies. So, expect other prices to swell as well.

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