Tuesday, April 26, 2005

Gas Prices Sky High??

Many people and industries are complaining of high gas prices. However, as anyone looks at the prices of a good, it must be adjusted for inflation. Using simple calculations, the price of gas has not risen as fast as many other goods and services. Everyone knows about their parents talking about a slice of pizza and a coke cosing 35cents. Do we complain that the average price of one slice of pizza is now $1.75?? Generally, we dont. The issue arises because as Americans, we have been spoiled with comparatively low gas prices. Europe has been paying over $3-$4 per liter for years already. America has just basically caught up to rising gas prices world wide. Comparatively speaking, gas prices are no higher than they were in the 1980's (after adjusting for inflation) and are relatively lower than the gas prices in the 70's when we went through a gas crisis. All this however does not mean people shouldn't care about these prices. Hummer H2 sales are off 17% from last year ( a SUV that gets approx 9mpg on a good day). SUV sales overall are down, and comsumers are switching towards 'crossover' vehicles. Be careful not to call them station wagons, because some PR guy from Mercedes or Cadillac will jump down your throat to clear up the differences. Bascially, they are raised stationwagons with lots of features. Some examples are the new Mercedes M-Class, the Cadillac SRX and the Audi Allroad. As gas prices continue to rise and travel becomes more expensive, people will switch to more economical cars. I do remember one thing that my grandfather told me years go. "If you cannot afford the gas, then you can't buy the cadillac." That makes me wonder why people who can spend $60,000 on the Escalade or Hummer are complaining??

0 Comments:

Post a Comment

<< Home