by Jim Quinn
This news brings into question a couple narratives being peddled to the American public. If the world is awash in all that U.S. fracking oil, why have oil prices gone up 65% in the last year, from the low $40s to over $70? Doesn’t supply and demand work any more? If you are a non-thinking parrot you would say it is due to increased demand because Trump has boosted the economy. You’d be wrong, as total miles driven in the U.S. is up less than 1% in the last year.
The price of a gallon is up 23% in the last year, or about 55 cents a gallon, and rising as we enter the summer driving season. A middle class family with two working parents will use approximately 1,000 gallons per year on average with two cars. That means their gasoline bill alone will be $550 more than a year ago, not to mention all products that will go up in price due to increased transportation costs and heating and cooling costs going up.
Middle class families making between $50,000 and $75,000 got an average tax cut of about $850 this year from the Trump tax bill. About 65% just disappeared in gasoline expenditures, with the rest being silently taken by corporations in the form of higher costs for everything. So it goes for the working middle class.
You may have noticed, gas prices are on the rise and hitting levels not seen in more than three years. Gas prices nationwide are up a nickel in just the last week. That’s 20 cents in the last month, according to AAA.
Drivers fueling up in New Jersey are paying just under $3 for a gallon of regular unleaded.
“It was $54.16 for 18 gallons, and I just paid $40 for 13 gallons,” Damian Woo told CBS News.
In California and Hawaii, gas prices are approaching $3.70 a gallon, nearly a dollar higher than the national average.
“There are 10 states that are at $3 a gallon or above,” AAA’s Robert Sinclair said
“We’re seeing extremely high demand for gasoline,” Sinclair said. “With the economy moving along as strongly as it is, there’s a lot more work, and with work, comes a lot more transportation.”
Sinclair says the steady climb is also due to a diminishing supply of crude oil.
“The price of gasoline is going up and we’re now at what is considered the pain point for many drivers,” Sinclair said.
But the drivers we spoke with said what they pay at the pump is simply part of the price of hitting the road.
“Can you afford the increase in gas prices?” CBS News asked.
“I can afford it, yeah, but I don’t like it,” Woo said.
“You need to put gas you need to go places so you need to pay,” Tania Ortega said. “I hate it, but what are we gonna do?”
Now is the busiest driving season and until September, one analyst said, Americans will pay an extra $200 dollars on gas compared to last year. But prices at the pump are still well-below the all-time high of $4.11 a gallon in 2008.