Well it was during June/July of this year that gasoline in RI was selling for $4.30 a gallon. Yesterday I paid $2.15. So in four months, the price has been cut in half, with no bottom in sight.
You have to go back to Spring of 2005 to find similar low prices. An in case you forgot, gas was selling for $1.25 a gallon back in December of 2001 (when I bought my current truck).
Will we see another halving of prices? Depends on how deep the recession goes.
With GM on the verge of going bankrupt, I feel their only chance of survival (short of the ever popular taxpayer funded bailout) is reinventing themselves as a hybrid company (as in Chevy Volt). But with fuel costs dropping so low I suspect the American consumer is not going to be very interested in paying more money for a car that uses less gas.
Sigh.
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3 comments:
Will we see another halving of prices?
I suspect gas is going to stay at about $2.00 to $2.50 in the short term. $2 gas is not a huge portion of vehicle cost-of-operation, and china and india are still poised for growth. If the global recession kicks in for good, then gas may continue to drop ..
GM's only hope of survival is to either become nationalized or to declare bankruptcy and renegotiate terms with the unions.
Some of their mainstream offerings (malibu, pontiac g8) are best-in-class, others are competitive (chevy cobalt, 3/4 ton trucks). They have no real small car or crossover competitor (aveo is a joke).
All the detroit manufacturers have a great deal of well-earned stigma built up from the crap they peddled in the 70s, 80s, and 90s. They are (mostly) making competitive cars again, but it will take time for consumer opinion to switch back in their favor (see toyota recalls).
The International Energy Agency (IEA) has long been a critic of the peak oil theory.
Their most recent world energy outlook report (executive summary) extrapolates a world energy demand growth rate of about 1.6% per year, mostly due to increasing industrialization of China and India. They also state that while we still have large total supplies of oil, production in existing fields will decline at a rate of about 7% per year.
It would be interesting to see world production, world demand, and world barrel market value plotted over the last 30 years or so.
Yep, I hear you about the Toyota recalls -- our mini van was recalled due to a rear lift-gate failure -- the door could fall down, hit you on the head, then automatically close on you -- OUCH.
I don't hold out much faith that GM will survive without bankruptcy. That will wipe out the Unions (and the underfunded benefits of a huge number of retired workers). Get rid of that and almost anyone could make a profitable auto company if the dealer network were already in place.
As for peak oil -- all I can say is the #1 proponent of that must be spending all his spare time wiping egg off his face, because oil was supposed to be $500 a barrel not $65.
If the US economy is in a tail spin (and it is), the China economy will crash 100 times harder. They depend on a robust US economy to keep their own economy growing.
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