American individuals' thirst for gas warrants every bit of its skyrocketing price.?

Question

It's not uncommon to hear they would sell their house and sleep in their car to afford even more expensive gas...instead of considering selling their car, switch to cheaper alternatives for transportation and still sleep in their bed.

Either Americans (and citizens of other increasingly oil greedy countries) fail to respond to incentives, or prices are still fair.

If the price is high but you still buy it, it's not speculation, it's demand. The only way to put downward pressure on the price of oil is refusing to buy.

In such a liquid market (no pun intended), the hypothesis of speculation doesn't hold water.

Answer 1

True, so true. In fact, I posted a similar question like this last week.

When it comes to gas prices, Americans just continue to defy all economic laws and common logic. Back when gas hit $3 a gallon, people started saying "Oh no, this is going to really affect Americans' driving habits." But it didn't. People said the same thing when gas hit $3.50 a gallon, and nothing really changed then, either.

Now gas is above $4 in most areas, and you still see Americans doing stupid/nonsensical things, like speeding up to get to a red light 100 feet ahead, or accelerating while going downhill, or driving 15 mph over the speed limit on an interstate highway with a posted speed limit of 70. Why could anyone possibly need to be in such a hurry? Good grief.

A lot of Americans will argue that gasoline demand is inelastic, meaning that increases in prices don't affect demand. They point out how many people live 20 miles from their job and how they have no other means to commute to work every day.

But, I still think there are ways we can cause gas prices to fall by making simple lifestyle changes. Lately I've been walking to the supermarket to buy groceries and that's a mile away. I figure I need the exercise . I wish more people wouldn't be so lazy.

Answer 2

Yes, you are correct. If demand is lowered, suppliers must lower prices to maintain the same net profit. If we don't buy at all, the oil gets put into a 'sales bin' and sold at whatever they can get for it. Like a flea market vendor near the end of the day, who will sell everything at rock-bottom prices just to get rid of it.

Tired of Paying High Gas Prices? Then Read This

http://www.associatedcontent.com/article...

Answer 3

In their economically challenged minds 2 things are going on. 1 they believe they're getting gouged and market forces have nothing to do with it. Hence we can drill our way out and all will be well in the world and SUV's will reign supreme again.. #2 a sense of entitlement for bigger and bigger vehicles because we're Americans. Until reality hits. That explains the fact that both Toyota and Honda already had Hybrid vehicles available while both GM and Ford were building truck plants and trucks. GM has since closed their recently built plants and some had only been in operation a few months.

Now that gas is dropping somewhat I suspect the recently traded in SUV's will once again be on the road. Until the next time. Ah Americans are so predictable it's sad.

Answer 4

It may seem like American's are gas greedy (and some are) but it's not as easy as you think to buy a brand new, gas friendly or gasless car. It's not as easy as you may think to trade in your car and ride your bike miles and miles to work.

People have built their entire lives over gas being cheap and readily available.

Answer 5

There seem to be a tipping point for us Americans.  $4.25/gal (ish) is as much as we can handle.  Once that point was hit demand fell and so did the price as supply went up.  Yes other factors all play in and could take some time to discuss.  However, we are driven as Americans and it seem to be a God given Right to own and drive our cars.  True or not we act as such.  One thing I cannot understand is why we need to look to the government to ease the costs.  Those with have, those without have not.  I was in the have not's not so long ago so I understand the pain.  Okay many had far less than I but then they probably wouldn't have a car to worry about gas prices.  Even when I had not I did not look to the government to pay my way.  I needed food and shelter, I took any job that paid me enough to get that, all extras were just not an option.  If you need your car you will cut something else, if you have an alternative mode of transport to ease your dependence on gas and not cut something else then that is what you want.  

I think you are suggesting it is the oil companies responsible for the high gas prices.  I will not dispute this but it is not true.  Congress and some others out there has made it impossible for the oil companies to develop more oil in turn this would make them more money while in turn bringing down the cost passed on to us.  I am not suggesting only using domestic oil, a balance is in order.  However, when we cannot use any of our oil and have to depend on foreign supply the oil companies are subject to the same price hike and in turn need to pass that cost on.  

Besides, this won't last much longer, I expect gas costs will drop to the mid $3 level by Christmas!  <-- Now I am a speculator.