From The Hoss's Mouth
Today, Hoss Cents Free Financial Money Magazine discusses the continuing decline in gas prices. Gas prices at the pump have been steadily decreasing over recent months. The big oil companies claim that supply and demand is what dictates the price of gas. There is much evidence to support this claim. For example, a report from the Federal Highway Administration (USA) indicates drivers in October 2008 drove 3.5 % fewer miles than in October 2007. Further, since November 2007 and October 2008, Americans have reduced their driving by 100 billion miles. These statistics clearly indicate less demand for gas.
Why are people driving less?
- History has shown that people adjust their driving habits to reduce expenses during tough economic strife and when gas prices are very high.
- In today's society, many people have the opportunity of doing much of their work from home.
- Availability of rapid transit.
- Gas prices exceed consumers' ability to pay.
The Hoss and Mrs. Hoss are prime examples. Due to the high gas prices during the summer months, we reduced our trips to and from our summer residence by 50%, which resulted in a savings of close to $1000.
All of the above supports Big Oil's claim that the law of supply and demand is the reason for continually decreasing gas prices.
The Hoss does not subscribe to this theory. He believes the oil companies have recognized that President Elect Obama is going to take the United States in a direction that is less reliant on oil. Obama's plan to introduce alternate energy sources and encourage the development of Hybrid vehicles will drastically reduce the nation's dependence on oil. But statistics repeatedly show that people don't change their energy consumption habits until they are hit hard in the pocketbook. Lower gas prices are lauded by most, especially during the current economic downturn, which the Hoss believes Big Oil is counting on. The Hoss is of the opinion that Big Oil is running scared and is reducing gas prices in an attempt to keep people from changing their current energy consumption habits, and ultimately from supporting President Elect Obama's plan toward alternate sources of energy.
The Hoss salutes President Elect Obama for his alternate energy plan. It will not only help the environment and our planet, but because of competition, it will also force Big Oil to continue with lower gas prices.
Stay on track,
The Hoss
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