The Wake

Everyone keeps saying that all of the tragedy down South is costing us more in the North. For gas, that is. While it’s insensitive, Katrina is thought to be the cause of creeping pump prices, and the question of when—and if—they’ll go down has no certain answer. According to www.knowledgeproblem.com, gas prices are largely determined by high world-crude-oil prices. If this is true, we should be blaming China and India for getting greedy and wanting to use gas as much as we do, not pinning the pricing on the swimming refineries.

The problem with raising gas prices is that it will raise the price of everything. Airplane tickets, cab rides and public transportation are obvious targets, but the cost of everyday items will swell as well. Clothing and other merchandise—especially those delivered in the interest of time, such as produce—are going to go up due to increased transportation costs. If gas prices were somehow kept lower everyone would benefit, not just SUV drivers.

It is true that most places in Europe pay more for their fuel. The fact is, though, that solid public transportation is a reality there, while it is not in the vast majority of the United States. In Venezuela, on the other hand, gas costs a mere 14 cents per gallon because the government subsidizes it.

Price markets fluctuate constantly. But restaurants do not change the price of a hamburger on a daily basis. If the government could level out the price either by subsidizing or sticking with a median price for an extended period of time, the general public would save money in the long run. This is especially true because this increase is thought to be only temporary—so why bother raising them at all? For example, say gas costs $2.25 a gallon, and in light of the recent travesty it’s going to be raised to $3 a gallon for one year, then go down to around $2.40 a gallon. If this raises the price on every consumer good (as practically nothing is free from the burden of some sort of shipping and handling), those prices will likely stay higher even after gas prices have bayed. If gas were raised to $2.50 a gallon and kept that way for one year or a year and a half, and the price of consumer goods did not spike, then we would be saving some.

One of those crazy OPEC-ers was onto something when it was decided that $4 (a gallon) is a high-benchmark price. In light of this, they are considering discontinuing output restrictions at the end of the month (www.knowledgeproblem.com).

While it is unlikely that the government will plan ahead and do something about this situation, we can hope. I don’t want to pay $3 for a gallon of gas, but I really don’t want to pay $3 for a carton of eggs, either.

If I may digress, not all of the refineries are in a hurry to get back into business. According to , Chevron is more concerned with finding the 3,000 people it employs in the affected area. They get a gold star.