We need alternatives to gasPublished 10:53am Friday, February 1, 2013
The iPad caused a new market of products to emerge – tablets. It wasn’t the first tablet, but it was the first to really bring the tablet to the forefront.
Soon after the iPad debuted, every computer firm worth their salt put up their own version. Many consumers didn’t want to pay the high prices of the iPad and opted for more competitively priced device. Though I once only knew people with iPads, I know now just as many with Android-based tablets.
And the more the market gets flooded with new devices, the more those prices have dropped across the board.
It’s a classic supply and demand scenario, one that drives the engine of free-market economics.
Any time demand is low and supply is high, prices will drop until a balance is found.
But as I spoke with Clay Ingram from AAA about a potential drop in gas prices, I heard Ingram speak of an economic trend that defies the expected results of supply and demand.
Monday was the eleventh straight day that gas prices have been increasing.
Gas prices are just something most people deal with – we rarely think about the factors behind the scenes that are driving the cost of fuel.
One would think since prices have been increasing, either supply is down or demand is up.
But Ingram said that is not what petroleum markets are seeing right now.
It’s actually quite the opposite. Since a lot of Americans are still reeling financially from the holiday season, January and February are not high travel months.
As such, demand for gasoline to fuel travel is down. Supply is up.
So while a barrel of crude is going for about $98, Ingram said the true cost should be closer to $60 or $70 – if gas prices were only a matter of supply and demand.
There is a consumer component in all of this. That is, we as drivers are usually quite lazy or habitual in our choice of where to purchase gas.
Maybe I do stop at the same gas station every day. I don’t look at the price. I stop there because they know me, and the personal service is worth the extra few pennies.
But even if we all start going only to the cheapest gas station, I don’t know if we will see any sort of measurable effect in the average price of gas.
For me, the only solution comes through a gradual easing of our dependence on gas to fuel our lives.
Whether that comes through alternative energy sources or just making the cars we have more efficient is immaterial.
Gas prices seem to be adhering to amusement-park economics. Think about the last time you went to Disney World or Six Flags. Do you remember how much you paid for a soda?
I can’t remember the exact cost the last time I went, but I can remember being almost insulted.
That was followed by a feeling of helplessness. I was thirsty. I needed a drink.
So I paid the ludicrous amount they were asking and went about my day.
As motorists, we have all bought our admission ticket. Now that we are stuck inside, we have to pay whatever price the markets cook up or face being stranded without transportation.
So while price shopping may help a little, the solution doesn’t lie in complaining to amusement park staff.
We need to find a different roller coaster.
Nelson is news editor for The Outlook.