Future Gas Prices.

See: Steiner, C. (2009) $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better and Heinberg, R. (2007) Peak Everything: Waking Up to the Century of Declines answers your question. Another good discussion includes: Garvin & Munger (26 Jan 2006). Sacramento On Empty. Sacramento News & Review..

Just plan on it and plan accordingly.

 

So food prices will benefit when diesel is also $20/gallon? I think not. Sounds more like food riots a'comin to me...

 

Current food prices are based on cheap oil. Maize and livestock are heavily subsidized. See: Food Inc (DVD). Yes, cost of food will go up, but there will also be a shift toward more sustainable food production and consumption. Current food production is unsustainable (negative input to output ratio). It takes more Joules of energy to produce beef and other crops than what we get from the crop. There will be more of an effort toward local food and less reliance on food that travels one-half way around the world. Local food may in fact, be at or lower or more sustainable cost.

 

Read in the newspaper today that our fuel prices in the UK are 30% higher now than 12 month ago so would hope it doesn't go up any more.

I spent about £7,000 (US$11,000) on fuel last tax year so a 30% increase this year would be disastrous for me, esp with the recession still dragging on over here.

I was hoping buying the Prius would cut my fuel costs and allow me to have some extra money to enjoy myself, though with a 30% increase in fuel costs it mean I will just stay where I was

I suppose I'll be in a better position than my fellow drivers though.


Word of warning to you all in the US. There are many benefits to increasing tax on fuel but DO NOT let your governments do it, as once they start they realise they can get away with it and they absolutely will not stop!

 

Had our government done it to any significant extent, we might have saved GM and Chrysler.
In UK the government has at least a tax reduction option in face of any sudden escalation in crude oil price. The US has little leverage.

 

The problem is this is a consumption country, and any tax to curtail consumption of anything is viewed as un-American. In that sense, we lag behind the rest of the industrial world. How to change the hearts and minds of the mainstream? It will take a seismological event. The politicians are useless. They just follow polls.

 

The problem is that you can find other reports that says gas prices won't go up that high. So no matter what happens, there will be some expert that will get it right and say, I told you so!

Here's a bit of truth for you guys, oil prices has little to do with demand, its all the hedgers and traders that are driving the price up.

 

Hedgers and traders cause short term fluctuations in the price of oil, but they cannot control prices over the long haul. The limiting factors become the need to store the oil while waiting for prices to rise and the money to pay for the stored oil. Admittedly, there is more storage and money available than any sane person would have expected, but that only means that the "short term" is several years rather than several weeks.

Ultimately, the ratio of supply to demand drives the price.

Tom

 

While hedgers and traders do have some affect on the fluctuations in price, there is definately a 'floor' to the price which is largely dependent on supply and demand.
The traders are basically gambling on where they THINK the supply and demand will be in 1,2,6 months out. This can give short term increase or decreases to the fundamental price.

 

When summer hits gas prices could be around $3 - 3.25 per gal.

 

Partially correct. Supply (also) has a big part to play in setting prices.

EIA - Short-Term Energy Outlook

"Escalating crude oil prices drive the annual average regular-grade gasoline retail price from $2.35 per gallon in 2009 to $2.84 in 2010 and $2.96 in 2011. Pump prices are likely to pass $3 per gallon at some point during the upcoming spring and summer. Projected annual average diesel fuel retail prices are $2.98 and $3.14 per gallon, respectively, in 2010 and 2011."

Frequently Asked Questions About Gas Prices

 

I think it will depend on how the economy is doing, which will either increase or decrease the demand.