Gas Prices: Can We Reduce Them?

There is a growing movement in the west to get gas prices down. With a gallon of unleaded now costing just over $4, in America people are beginning to feel the pinch. Over in Great Britain motorists can only dream of such low prices, groaning as they are under the weight of an eye watering $8.8 per gallonfor unleaded. That’s right, 8.8 dollars per gallon! Most of this is fuel duty with purchase tax (VAT) on top. So the Brits are paying a tax on the tax they pay. Think about that.

With the powerful environmental lobby gloating and telling us all to walk or cycle and governments everywhere raking in the tax, the hard pressed motorist is just beginning to organise. With global demand for the black stuff growing ever higher the market fundamentals don’t look like changing. In fact, because of the dramatic slide in share prices and the re-introduction of inflation, there aren’t many places where you can get a better return for your money than from a barrel of oil. Which means that if you already own a barrel or two you’d be hard pushed to think of a reason to sell them right now and if you did, what would you do with the cash? Well, buy another barrel of course.

This is why oil states don’t want to pump more than they absolutely have to. It’s simply worth more to them in the ground than in a bank account that pays diddly-squat interest because of the credit crunch. This is restraining supply and adding to the upward price pressure. Anyway why should they sell more than they want to just so that western governments can add a tax to it?

If the oil producers can see that motorists will pay $8.8 per gallon, then if they had any sense they would stick their prices up even further and take what the market will bear for themselves, rather than letting western governments cream off their potential profit.

So is there any point in protesting? Just because a million or so customers don’t buy gas on a given day, or boycott a particular chain of gas stations, will that change things? Well perhaps. In a democracy the government should in theory at least, represent the people. If by protesting effectively the message can be conveyed in such a way as to get legislators to reduce their tax take, then yes, the price can be lowered.