You're Cutting Back, But Gas Costs More Each Day. Why?
The gas ticker kept ticking, and the reasons why were mixed.
Today, Jeremy Miles filled up his SUV. He said he doesn't know why gas is so high.
"I believe it's greed," said Lisa Collins. Adolphus Dean said the problem is the U.S. government, while Shaun Galbraith thought otherwise. "There's a high demand, and a low supply, so gas is naturally going to increase," he said.
But Americans are cutting back. The Federal Highway Administration reported traffic levels were down nearly 1.5 percent, nationwide. Fewer people on the roads means fewer trips to the pump. Consumption is expected to decrease this year by about half a percent, according the Energy Information Administration.
Dr. Tim Kane, professor of economics at UT Tyler, said oil is an international commodity, and the problem lies in a number of factors. "Oil is priced in dollars so as the dollar goes down, the sellers of oil overseas ask for higher prices," he said.
Kane said the rules of supply and demand are still in effect. "Consumers temporarily reward producers with higher prices and higher profits as a means of telling them we want you to produce more," he said.
But oil production and refining isn't expanding anytime too soon, and restrictions on supply are now part of a global strain. "India and China are growing very rapidly, and they now want to do the same things that we did when oil was discovered in our country."
And that means the engine of growth will keep on running. Unfortunately for us, today's engines still like the taste of gasoline.