Thursday, October 13, 2005

$1 per Gallon Gas Coming Back?

William Sargant thinks so, within a year or two. He argues that special interest groups in the form of environmentalists and agricultural activists have successfully lobbied the government into creating a network of "boutique" gas formulas which, when you take into account the different octane ratings, comes out to 59 different types of fuel among the 50 states. He also argues that speculative investing is creating an artificial demand for oil.

While there may be a ring of truth in those, it doesn't follow necessarily to me that consumers are going to become aware of these issues within the next couple of years and produce results at the polls that would cause us all to move towards a simple set of fuels. Consumers have not curbed their demand for oil much through the recent price hikes, and unless they are spending something approaching five bucks a gallon I don't think they'll take it seriously.

And have you seen the taxes on fuel lately? I'm inclined to believe our government officials will make up the savings gap on fuel simplicity with more taxes.

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