Spike in gas prices threatens economic recovery
Pain at the pump is being felt again and if the recent spike in gas prices continues, or even if the prices now being paid last, the fragile economy could take a hit.
Gas prices have gone up on average about 70 cents since early January when some motorists could find a gallon of unleaded regular for $3.27. Today, you are lucky to find a price below $3.90 a gallon, with many stations charging more than $4.10 a gallon.
Even the spokesman for the Southern California Automobile Club could not fully explain the spike. He said there is normally a spike when refineries switch over to the more expensive summer blend of gas, but for some reason they did that earlier than in the past. Maybe that is there way for making up for switching from the summer blend earlier last fall when the price spiked then.
There was a spike in crude oil prices, but that spike that saw a barrel go as high as more than $98, has dropped to below $93 today, about where it was when gas was 70 cents a gallon cheaper.
Of course, Californians pay just about the most of anybody in the nation. In some states, gas is still around the $3 mark. However, we in the Golden State also pay about 65 cents a gallon in taxes, so it adds up.
Also, we have not heard much from our politicians who are licking their chops over the higher prices. Seventy cents per gallon more generates about an additional 6 cents a gallon in sales tax revenue for the state. At roughly 35 million gallons of gasoline pumped a day, that’s about $210,000 a day, or $1.47 million a week, more for the state to spend.
However, there is a cost. When drivers are having to dig deeper into their wallets for gas, they are not spending as much in restaurants and retail stores and that will eventually slow down the economy.
We need relief at the pump and politicians need to be questioning why the price is so high.