Gasoline is a commodity that changes in price based upon supply and demand. Twenty-five years ago, during OPEC’s oil embargo, it became apparent to nearly everyone in America that the cost of this commodity could fluctuate dramatically.
The elasticity of demand is what drives up oil prices, not simply the reduction of supply. Our conspicuous consumption has given suppliers of this commodity control over the price of a gallon of gas.
Americans who claim that the current cost of oil is too high are either naive or a bunch of selfish crybabies. These people probably should have thought about the volatility of the price of gas before sinking $40,000 into their gas-guzzling behemoths.
If the price of gasoline seems too high, think about purchasing a more reasonable mode of transportation. By any logical evaluation, the price of gasoline should double to compensate for the pollution caused by resource-wasting, pollution-causing automobiles.
This whole business is a matter of perception. Gas that costs $1.75 per gallon would not have seemed particularly expensive two years ago when prices hovered around $1.35, but because we went through an oil glut and the price crashed, we became spoiled by low prices. In real dollars, a year ago we were paying the lowest price for gas in history.
In 1974, ignorance of oil economics was rampant in the United States. The industry was being released from price controls, Earth Day was only four years old, and very few people had even heard of OPEC. Today we do not have an excuse, other than our arrogance and foolishness.
The federal government should not release strategic oil reserves set aside for a national emergency, and should not reduce taxes as an election year ploy, but should simply let market forces and consumer common sense rule the day.
