Thursday, September 22, 2005
Gas Prices: The Worst is Yet to Come
Hurricane Rita is headed directly towards facilities that provide almost 25% of the total US oil refining capacity. Analysts are now saying that if these facilities are significantly affected by Hurricane Rita, gasoline prices may hit 5.00$US/gal which would be more than double the price in July.
This would translate to gas prices from 1.33$C/litre to 1.60$C/litre in Canada.
These huge increases in transportation costs will materially affect everyone's life within a short period of time. Anyone who thinks that only drivers of gas guzzlers will suffer is delusional. Obvious everyday things that will be affected include travel: air travel, taxis and public transit, and transportation of virtually all consumer goods including food. One of the greatest impacts will be on those who rely on home heating fuel - which will affect home owners and renters alike - particularly those on fixed incomes.
I can't imagine how this won't lead to overall inflation rates not seen in a generation. Ultimately, increased fuel prices will result in greater class distinction: the 'haves' (who can absorb the additional costs) and the 'have nots' who will perceive the 'American Dream' to be just that, a dream.
In the time it took to finish this post, gas prices in Ontario have already exceeded my estimates. Good luck to all, especially truckers and taxi drivers, who have no control over how much they're allowed to charge for their services.
(I notice that this pic is becoming more 'popular' as the day goes on......... I'm flattered. Thanks guys.)