When will gas hit $3.00 again, and how high will it go?

Your test theory is exactly what happened last year. Look what it did to the world economy. The Fannie Freddie debaucle and inability of people to pay mortgages and other bills was a direct result of extremely high fuel prices.

Hell $75 fill ups dont phase me. Thats exactly what I see now about every week and a half to two weeks. However the $160 fill ups of a year and a half ago hurt a bit.

The thing you have to realize is that in construction when prices go up demand goes way down.

The rise in fuel prices put alot of small contractors out of business back then.

 

What a coincidence. We had a 1994 RX330 and a 2007 Sienna. The Lexus is gone - it was luxurious, small and get the same mileage as the much bigger minivan. The minivan is useful but I won't buy it again.

 

For this math-impaired culture, this would make a lot of fuel issues more intuitive.

It would also have caused last year's Cash For Clunkers rules to be written in a form to make my Accord-to-Prius trade qualify for the incentive. The car deal essentially required a savings of 1 GPC for the smaller incentive, 2 GPC for the larger amount. My trade save 2.17 GPC. But because America uses and understands only the less useful MPG scale, the rules were written in the wrong scale for me to qualify. (Do I sound greedy?)

I was infuriated when the truck rules were rewritten at the last minute to pay the incentives for saving even less than 1 GPC.

 

Why dont we use it? Because that would not be a truly accurate measure of fuel economy

 

The Sienna was a great van. It would haul huge furniture, tow a motorcycle trailer and get 24 - 25 mpg on the highway. And you could take six friends to dinner in comfort.

I would've bought a new Sienna if Toyota had kept the engine at 200 hp (my 1998 had ample power) and improved the fuel economy. Instead, Toyota increased the hp to something like 280 and kept the same fuel economy. I never understood that.

 

I travel a lot, and have seen $3.00 (already) for premium all over the East Coast, and parts of the Midwest. Regular gas is about 0.25-0.30 cheaper than premium. I suspect prices for regular to reach $3.00 by the Spring, or whenever refiners convert over.

To be honst, I'm very surprised that prices have not already gone way above this, as states and cities struggle to meet their billions of debt. Adding 5, or 10 cents to a gallon of gas, on state taxes would be a no-brainer if I was a state legislator, and looking for ways to balance the budget that didn't involve layoffs.

 

Raising taxes is a good way to discourage use (due to higher costs) and ends up *reducing* the tax revenues. Counterintuitive as it seems, encouraging consumption, but at a lower per-unit cost, is the way to increase revenues.

Works every time it's tried.

Of course, there's that added environmental impact stuff that muddies the waters...but if your goal is simply to raise the amount in the coffers, you need to bring in more money. And, that is done through a proven approach...reducing costs, thus increasing consumption, by lowering the taxes.

Chuck

 

If I were a politician, raising taxes will surely make me lose my job. If fuel prices increase, it will drive developers and manufacturers out of my district, we can lose jobs. Every time someone pumps gas, they will remember me.

It is better to float a 30 year bond and mortgage our future. Only kidding.

 

One other consideration in setting higher gasoline taxes is that it's a regressive tax -- hits the low income people for a greater % of their income than it does for higher income people.

 

And why not?

 

Both are true to a point.
For example, if you lowered taxes to 0, it wouldn't matter how much consumption increased as you are taxing non of it, therefore no income.
If you raised taxes to 100%, no one would be buying/working so you would bring in zero money because of no consumption/work.
Many changes in the taxes have both a short term and long term impact which may not be the same.
It is a matter of where you draw the line to get a good balance.

 

For it to be a true accurate measure that 100 mi would all have to be driven in the same trip

 

I am referring only to how the MPG or GPC number is expressed. All the driving conditions and YMMV issues are exactly same for either measure.

 

Crude is over $80 a barrel again. it's just a matter of time. Only ignorant folks are scratching their heads whtn it gets back up to a realistic aount ... regardless of winter/summer blends.

.

 

Who gives a sh it. Lol I drive a prius lol on electric

 

You're touching on a good point. Sometimes LOWERING taxes will bring in more revenue, and vice versa - INCREASING taxes reduces revenue.

The old saying, I think it was Reagan that said it is:
If you want to discourage something, tax it. If you want to encourage something, subsidize it.

(which makes you think - look at all the stuff our .gov subsidizes!)


There is a balance point where the price of gas (the combined actual cost and taxes) will allow people to drive freely, and provide considerable revenue. If that total price moves, things happen, either way. If gas drops way down, like we saw early in 09, people drive more, but there is actually less revenue, because the actual dollar amount of taxes per gallon dropped so much. Vice that, the prices go up, and people get very conscious of their driving and drive much less, and people aren't paying taxes on gas they aren't buying.

I think right now, the average for the last few months of around $2.50 is a good equilibrium. I won't cry much if gas prices go up, but I won't like it. Luckily I started a job (after being laid off and unemployed for two months) that is much closer to home, so instead of ~54 miles a day, I now only have to drive 30.

 

You have an electric-only Prius? Where did you get one? Where can I get one?

 

Gas here in Switzerland cost $5.77 a gallon. It is cheaper in Switzerland than surrounding countries, like Germany, France, Italy, Austria..