Since June 19 we've been tracking Gas Prices locally and nationally. Looking at the trend on the 19th we cautioned, "Gas prices are likely to continue to go up or at least maintain the $4 rate." Like most economic projections during the last 3 months this one was very wrong. And who would have guessed that today I would locally see gas prices posted anywhere from $2.94 to $3.25!
That's right! Gas prices under $3, down more than $1 from 3 months ago. The price of oil - also down from the high of $147 a barrel from July to under $80 a barrel! If you had bet on oil staying high as commodity traders do, you would have 'lost your shirt.' The same for gas prices.
It's rare for the consumer to benefit from economic crisis. With gas prices down as well as car prices, this is one of those rare times .
The oil and gas crisis has had dramatic effects on the automotive industry. Sales for GM, Ford and even Toyota have fallen greatly. Most of the sales decline has been attributed to GM and Ford's reliance on trucks and SUV sales. The gas crisis has literally stopped sales of these vehicles because of their gas guzzling reputations. GM and Ford's stocks have fallen below $10 a share and credit from banks has been tight if not frozen. Consumers wanting to buy cars, even those with good credit, have been turned away dealers because of bank reluctance to lend.
This set of circumstances led the automotive industry to request help from the Federal government. A $25 billion loan is being provided to help stabilize the industry. Will it be enough? Hard to say as many changes will be required and there is not a lot of time. Repercussions of the oil crisis are having widespread effect. In response to the earlier crisis (June) budgets and projections had to be altered for small businesses (trucking, for example), municipalities ( redoing budgets for a fiscal year just begun), utilities ( new projections of much higher costs), and governments (budget cutbacks and need for reallocation of expenditures for higher energy costs at a time when less revenue from taxes are coming in). An overall economic crisis.
Now energy costs are going down. Will the new plans have to be scratched? Like the commodity trader who bet on higher prices continuing and now losing their bets, will the same thing happen to other entities who have adjusted their plans? With volatile ups and downs the real question if what is the real price of anything. A full stabilization plan is called for, one that will benefit all parties and restore balance.
Congress has passed legislation providing the Department of Treasury with $700 billion dollars to start the balancing process to provide a fuel injection to those sectors that need assistance right away. banking, automotive industry, states and municipalities.
Meanwhile the consumer will hunt for bargains and hope that gas and energy prices continue to go down. According to the AAA Daily Fuel Gauge report the current national average is $3.15 per gallon just 40 cents more than a year ago. In Pittsfield today's average is $3.23. A year ago it was $2.67. Use the AAA Gas Price Locator and AAA Daily Gas Prices in our "In the Berkshires" sidebar to follow these prices regularly and plan your expenditures accordingly.
Will the $700 billion fuel recovery and stabilization? The process has just begun and is still being worked out. Now it is a worldwide problem with European governments injection $2 trilion dollars into their economies. A stabilization plan is evolving.
We can breathe a sigh of relief that at least gas prices are going down. Will that continue?
Stay tuned.
That's right! Gas prices under $3, down more than $1 from 3 months ago. The price of oil - also down from the high of $147 a barrel from July to under $80 a barrel! If you had bet on oil staying high as commodity traders do, you would have 'lost your shirt.' The same for gas prices.
It's rare for the consumer to benefit from economic crisis. With gas prices down as well as car prices, this is one of those rare times .
The oil and gas crisis has had dramatic effects on the automotive industry. Sales for GM, Ford and even Toyota have fallen greatly. Most of the sales decline has been attributed to GM and Ford's reliance on trucks and SUV sales. The gas crisis has literally stopped sales of these vehicles because of their gas guzzling reputations. GM and Ford's stocks have fallen below $10 a share and credit from banks has been tight if not frozen. Consumers wanting to buy cars, even those with good credit, have been turned away dealers because of bank reluctance to lend.
This set of circumstances led the automotive industry to request help from the Federal government. A $25 billion loan is being provided to help stabilize the industry. Will it be enough? Hard to say as many changes will be required and there is not a lot of time. Repercussions of the oil crisis are having widespread effect. In response to the earlier crisis (June) budgets and projections had to be altered for small businesses (trucking, for example), municipalities ( redoing budgets for a fiscal year just begun), utilities ( new projections of much higher costs), and governments (budget cutbacks and need for reallocation of expenditures for higher energy costs at a time when less revenue from taxes are coming in). An overall economic crisis.
Now energy costs are going down. Will the new plans have to be scratched? Like the commodity trader who bet on higher prices continuing and now losing their bets, will the same thing happen to other entities who have adjusted their plans? With volatile ups and downs the real question if what is the real price of anything. A full stabilization plan is called for, one that will benefit all parties and restore balance.
Congress has passed legislation providing the Department of Treasury with $700 billion dollars to start the balancing process to provide a fuel injection to those sectors that need assistance right away. banking, automotive industry, states and municipalities.
Meanwhile the consumer will hunt for bargains and hope that gas and energy prices continue to go down. According to the AAA Daily Fuel Gauge report the current national average is $3.15 per gallon just 40 cents more than a year ago. In Pittsfield today's average is $3.23. A year ago it was $2.67. Use the AAA Gas Price Locator and AAA Daily Gas Prices in our "In the Berkshires" sidebar to follow these prices regularly and plan your expenditures accordingly.
Will the $700 billion fuel recovery and stabilization? The process has just begun and is still being worked out. Now it is a worldwide problem with European governments injection $2 trilion dollars into their economies. A stabilization plan is evolving.
We can breathe a sigh of relief that at least gas prices are going down. Will that continue?
Stay tuned.
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